This means income tax for minimum wage earners has essentially been abolished.

The government has long served notice of its intent to lessen taxation, and the relief being offered to workers on minimum wage is to ensure fairness in income tax administration.

The Government will review the income tax threshold by “pegging the tax-free threshold to the current minimum wage,” Finance Minister Ken Ofori Atta announced in Parliament as he delivered the budget statement.

The minimum wage currently stands at GHc9.68 cedis, up from GHc 8.80, after the most recent increase in July 2017, set to take effect in January 2018.

Relief for private universities

Tax relief has also been given to other section of society with private universities set to benefit from yet to be announced breaks.

“It is government’s intention to support the sector in order to position Ghana as the premier higher education hub of the sub-region and to attract critical foreign direct investment into the sector,” Mr. Ofori Atta said.

The reliefs may, however appear to be contingent on the eventual use of the profits, according to the Finance Minister’s choice of words.

“For the long-term development of a local human capital base for a changing world, we will grant relief for corporate income tax paid by privately owned managed universities to the extent that profits are ploughed back to expand or maintain facilities,” he noted.

Tax holidays for young entrepreneurs

As part of the governments attempts to bolster young entrepreneurs, categorized into ages 35 and below, it will, through the National Entrepreneurship and Innovation Plan grant tax holidays based on the number of persons employed by start-ups or early stage businesses.”

“A preferential tax rate of between 3 to 5 years will be granted after the tax holiday. They will also be allowed to carry forward losses for five years,” the Finance Minister announced.

Special Import Levy to stay

The National Fiscal Stabilization Levy and the Special Import Levy will be extended to the end of 2019.

The Special Import Levy, which was introduced in 2017 by the previous government, received huge backlash from importers who described it as a nuisance tax.

The National Fiscal Stabilization Levy is imposed on Non-Bank Financial Institutions, Insurance companies, Telecommunications companies, maritime and airport terminals, among others.

Other reforms

• The 7.5 percent income tax on the commission of lotto marketing companies will be abolished along with the 5 percent withholding tax on lotto prizes.
• The government will introduce voluntary disclosure procedures (VDP) in the revenue administration act, 2016 (Act 915) to waive penalties on voluntary disclosures and payment of unreported and understated taxes by tax payers. Tax payers will be required to arrange to pay such taxes withinperiodiod agreed with the Ghana Revenue Authority.
• In 2018, amnesty will be sought from Parliament to exempt taxpayers who register and file returns, within a targeted period, from paying penalties and interest for late or non-submissions of returns and late payments. This will also include exemption from prosecution.
• Alternative Dispute Resolution Mechanisms will be introduced to resolve tax disputes “in order to instill confidence in investors.”

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By: Delali Adogla-Bessa/citifmonline.com/Ghana

The post #Ghbudget: Minimum wage tax scrapped, Special Import Levy stays appeared first on Citi 97.3 FM - Relevant Radio. Always.

He is however appealing to the government to scrap the 2 percent levy, which largely affects second-hand clothing dealers.

“If parliament accepts this budget and approve it, the 1% special import duty will be abolished; but we still want to appeal to the ministry of finance that the special import levy we have 1% and 2%. The 1% people will be very happy to hear that the special import levy is gone; but we want to appeal to the ministry that it has 2% hiding there and of cause, maybe their attention wasn’t drawn; but we want to draw their attention that those who bring in second-hand clothing and other things at Kantamanto, they are still affected by the 2% special import levy.”

Mr. Awingobit in an interview on Eyewitness News, said the association welcomes all of the tax cuts and is confident they will help private businesses expand and help strengthen the country’s economy.

Ghana’s Finance Minister, Ken Ofori Atta announced on Thursday [March 2, 2017], during the delivery of the 2017 budget statement that government had abolished about twelve taxes including the 1% special import levy.

Some members of the opposition National Democratic Congress (NDC) have expressed dissatisfaction with some of the cuts introduced by the government, but Mr Awingobit noted that, the reduction in taxes on the importation of raw materials would have positive effects on the economy.

“If raw materials import duties have been abolished and you produce locally, commodity prices will come down and you will produce more quantities for local consumption and even export to other countries,” he noted.

He said government’s one-district one-factory policy, which was announced to commence this year, will also help the country produce more products it consumes locally to move the country from being import driven.

‘2016 budget deceptive’

A former Deputy Minister of Finance, Cassiel Ato Forson, described the budget statement as deceptive and populist. According to him, the budget does not fit into the country’s medium-term objectives and will lead the country into difficult times.

He said the tax cut among other developments announced by the government will only worsen the situation of Ghanaians and would lead to dumping of inferior goods.

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By: Jonas Nyabor/citifmonline.com/Ghana
Follow @jnyabor

The post Abolish 2% import levy too – Importers Association plead appeared first on Citi 97.3 FM - Relevant Radio. Always.