2018 Budget Highlights
Commentary by PWC report state it in this way
In a bid to consolidate the Ghanaian economy’s path to macroeconomic stability and to boost the productive sectors of the economy, the 2018 Budget Statement (“the Budget”) of Government of Ghana has the theme “from stabilisation to growth: putting Ghana back to work again”. This is anchored on the medium term development programme aimed at providing opportunities for growth and job creation.
The Akufo-Addo Government’s maiden budget in March 2017 highlighted a number of bold policy initiatives designed to restore macroeconomic stability, tackle structural rigidity in the budget, boost productivity through abolishing “nuisance taxes” while plugging revenue leakages and reducing import exemptions, tightening expenditure controls to minimize inefficiencies, and reducing the incidence of poverty through job creation. The 2018 Budget Statement is premised on consolidating the gains made during 2017 in stabilising the Ghanaian economy and increasing individual participation in the economy by “putting Ghana back to work”.
While commending Government for achieving its fiscal target, we encourage the continued pursuit and implementation of measures that stimulate higher growth in the non-oil growth sector, which is more inclusive and sustainable.
Direct Tax Initiatives
- Granting tax breaks to privately owned and managed universities to help position Ghana as a higher-education hub
- Exempting Collective Investment Schemes and Real Estate Investment Trusts (“REITs”) from income tax to deepen the capital market and address the housing deficit
- Granting additional tax incentives to support agro-processing businesses under the Akufo-Addo Program for Economic Transformation (“AAPET”)
- Providing accelerated depreciation on machines of manufacturers and importers for the implementation of the excise tax stamp policy
- Providing tax concession for Ghanaian start-up entrepreneurs under 36 years to encourage innovation and employment as part of the National Entrepreneurship and Innovation Plan (“NEIP”)
- Abolishing income tax on commissions to lotto agents and lotto winnings to discourage illegal lottery activities
- Expanding the tax-free income tax band to avoid taxing of minimum wage
- Inculcating the culture of filing income tax returns by linking access to Government services to proof of filing of returns
- Unifying Pension Schemes in line with the National Pensions Act to create some fiscal space for Government and streamline the pension’s payment process
- Extending the validity period of the 5% National Fiscal Stabilisation Levy (“NFSL”) to December 2019 to generate additional revenue for social interventions programmes
Indirect Tax Initiatives
- Introducing 7% VAT withholding tax on standard-rated supplies to improve VAT compliance
- Rolling out the fiscal electronic devices to facilitate real-time monitoring of VAT collections
- Enforcing the affixing of Excise Tax Stamps on qualifying excisable products such as beers and soft drinks to protect revenue and check smuggling and counterfeiting of such products
- Abolishing duties on some agricultural produce processing equipment and machinery
- Reforming customs suspense regime – transit and warehousing – to deal with abuses in the system
- Extending the 2% Special Import Levy (“SIL”) to December 2019 to generate additional revenue for social interventions programmes
Today, the Finance Minister will be at the Parliament to read the Mid Year Budget for 2018. Some have argued that we are in a season not favourable ( High Petrol Prices, depreciation of Cedis Against major foreign Currencies) for the Tax increase but rather our Tax system should be broadened to capture everyone. Some concern citizens have expressed their unhappiness about any initiatives to increase Tax. They have said that the few people out the “un-captured” taxed masses will continue to bear high transaction while the rest continue to enjoy.
Will the Concerns of the people be Judge and accorded due address? Today will tell it all