This is the estimation of consumer rights group, CUTS Ghana.

The group maintains that tapping into the potential should bridge the perennial revenue collection deficit that faces the country.

The persistent issues of high cost of collection, absence of reliable database as well as fraud perpetrated by tax collectors have been cited as concerns impeding the collection of property rates in Ghana.

The issue has also impacted the internally generated revenue of district assemblies hence having a toll on the national budget.

The Country Director for CUTS Ghana, Appiah Adomako Kusi stressed the relevance of the property rate to Citi Business News.

“One area that we have been able to identify is property rates where we realize most assemblies are unable to collect because of varied reasons and our conservative estimates suggest that we can raise not less than 5 billion cedis annually from property rates.”

“This could also be used to finance projects at the district levels which will also by extension means tthta the overreliance on the District Assembly Common Fund (DACF) or Accra for funding is going to be reduced,” he added.

For this year, government is seeking to raise an estimated 51 billion cedis in revenue.

As a result, the Finance Minister has outlined major policy initiatives aimed at achieving this target.

These largely include the enforcement of the excise tax stamp policy, introduction of Tax Amnesty as well as new laws to enforce compliance on tracking financial proceeds of businesses operating in Ghana and elsewhere across the globe.

The ultimate aim is also to achieve what the government describes as Ghana Beyond Aid which will reduce the over dependency on donor support for major infrastructural developments.

Mr. Adomako Kusi believes this is also possible if the government through the Ministry of Finance enforces property rate collection.

This will also mean Ghana will improve its tax to GDP appreciably.

“Largely, Ghana as a country has not been able to do well when it comes to revenue mobilization. Our tax to GDP ratio is less than 17 percent; when you compare that to OECD countries, it averages around 43 percent that means that if we want to develop, then we should be able to raise taxes locally.”

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post Ghana losing GH¢5bn in property rates annually – CUTS Ghana appeared first on Citi 97.3 FM - Relevant Radio. Always.

A visit by Citi Business News to the Cantonment premises of the television station revealed that the GRA had restricted entry into the company with a seal of the Commissioner General.

The premises of the station has since been locked up, with the building cordoned off with yellow tape.

Checks have also revealed that the station went off air for a few minutes but is now broadcasting again.

GRA has recently begun cracking down on companies that have failed to fulfill their tax obligations.

One of Ghana’s busiest commercial centres, the Accra Mall was almost closed down in November by the GRA for owning over 2 million cedis in unpaid tax arrears, however, swift intervention from the managers of the facility averted the situation.

The move was triggered after the company failed to pay the said taxes despite an expiration of the deadline about two months ago.

The amount, which is taxes owed in VAT, also followed an audit of the operations of the management of the mall by the GRA.

It is unclear exactly how much  Metro TV owes and whether they were also given time to pay off the arrears.

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By: citifmonline.com/Ghana

The post GRA shuts down Metro TV over unpaid taxes appeared first on Citi 97.3 FM - Relevant Radio. Always.

The Ghana Revenue Authority embarked on a distress order to retrieve about 2 million cedis in tax arrears from the management of the Accra Mall.

The move was triggered after the company failed to pay the said taxes despite an expiration of the deadline about two months ago.

The amount, which is taxes owed in VAT, also followed an audit of the operations of the management of the mall by the GRA.

The Chief Revenue Officer, Debt Management and Compliance of the GRA, Wisdom Hetor, is confident the exercise will improve voluntary tax compliance.

“The audit covers between 2013 and 2015, but the demand notice was served on the 11^th of September 2017, and the final demand notice was served on the 26^th of October, 2017. So before this exercise, we have had several meetings with them to make sure that we collect the money from them, but they always give varied excuses so we have no other option than to come today to execute the mandate,”  he stated.

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post Accra Mall escapes closure over taxes appeared first on Citi 97.3 FM - Relevant Radio. Always.

According to him, the education of the youth is a “core value” of Danish culture, with the state willing to support the academic exploits of students.

[contextly_sidebar id=”SUibzQizvlhBiWEPnon6c2gUBIa0avZx”]”[Free education] has been like this for many years in Denmark.  I’ve never experienced anything else, it’s free to have education in Denmark. There’s also a support system for people who are studying, so they have support from the state,” he said in an interview with Citi FM‘s Bernard Avle.

“We can always have a discussion on whether we have the right balance, but it is the core value in Denmark and our democracy is built on the old school reforms – they are more than 100 years old – where it was an obligation for people to go to school and it was supported by the state. Funding came from a very high tech level. We tax persons more than 50 percent on average, we have all kinds of taxes which are of course needed when you want to have a big public sector.”

He stated that the importance of education to the development of the country had been firmly established in the Scandinavian nation

As a result, despite his own preference for the taxes to be lowered, the citizens are more than happy to pay the high taxes to ensure that their wards have access to quality educational services.

“Our main focus is on education. We need to educate our population so that they are able to reach out for new opportunities. I have a son who’s 26 years old, and is now working with Microsoft in Copenhagen, but I don’t understand what he’s working on. The next generation will see new opportunities that we cannot even imagine today. What we can do is to educate them so that they can have a chance to reach out for new opportunities,” he said.

“You could find another balance as a liberal, I would like to see it lowered a little bit so we could have a bigger private sector, but that is more of an ideological debate.”

‘Great potential’

Anders Samuelsen praised Ghana’s democratic credentials which he said had earned it respect around the globe, and had positioned the West African country as a great destination for potential investors.

“Ghana is a great example of the potential we see in Africa. [Ghana] is one of the examples people look up to and that’s one of the reasons why our Queen is looking forward to this visit. You have a good story and a good track record and we have the same focus in trying to develop human rights, democracy and respect for law and order, and at the same time, we have a common view on trade as being one of the most important ways to get people out of poverty to middle-class standard and thereby being able to live the life they dream of,” he said.

Ghana’s Free SHS education

In Ghana, very few people in the formal sector pay taxes while the majority of the population in the informal sector are not captured in the tax net.

In spite of this, and the fact that the country largely depends on donor funding to support its budget, the government has implemented a policy to offer free Senior High School education.

The initial stages of the policy, which is to cost the government some Ghc400 million for the first academic year, has been fraught with infrastructural challenges in many schools.

Government has so far not disbursed all the monies needed by the schools to cater for the first year students who are the beginners for the policy’s implementation.

There have been concerns about how the country intends to fund the programme, sustain it and also maintain quality education, considering that the economy largely thrives on importation and services with very little focus on industrialization.

Danish queen’s visit

Citi FM’s reports from Denmark come ahead of the official State Visit of Denmark’s Head of State, Her Majesty the Queen Margrethe II, from November 23 to November 24.

The 3-day press trip to Denmark was organised for four selected Ghanaian journalists, including Citi Breakfast Show host, Bernard Koku Avle.

The press trip will be capped with a press conference with Queen Margrethe II.

The Queen, on her eventual historic visit to Ghana, is expected to be accompanied by a Danish business delegation within three focus sectors, namely food & agriculture, sustainability, maritime, infrastructure and railways.

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By: Edwin Kwakofi/citifmonline.com/Ghana

The post Higher taxes fund free education – Danish Foreign Minister appeared first on Citi 97.3 FM - Relevant Radio. Always.

The sin tax, which is a levy deliberately slapped on users of tobacco, alcohol and sugar, is a module in some countries like Thailand, Australia, Switzerland, Korea among others, to support the prevention of resultant diseases from the consumption of these products.

[contextly_sidebar id=”OIYkhx3hmAZg47I2O8bRuq8HMtIHFrV3″]According to Dr. Da Costa Aboagye, who has done extensive work in health insurance, public health promotion, what government needs to do, is to develop a sustainable preventative strategy to help people take control over their lives.

“This means people consuming alcohol; high sugar and tobacco are discouraged from doing so by increasing taxes on such products. When these taxes are increased, it is assumed that alcohol, excessive sugar, tobacco consumers may not be able to buy in excess of what they would normally consume. The idea is to help people live a healthier lifestyle.”

“Such taxes are thus used to “prevent” the likely resultant diseases of such products like diabetes, non-communicable diseases (NCDs) and others. The ‘sin taxes’ are geared towards the prevention of diseases, not treatment of diseases. The NHIS is unfortunately medical and treatment focused, and unless their activities incorporate health promotion and prevention strategies, it cannot advocate for the use of sin taxes,” he noted.

According to him, in all countries where tobacco, sugar and alcohol are specially taxed to support health delivery, it is used to support health promotion and prevention of diseases which will in effect, reduce the disease burdens and saves cost.

“Normally in Thailand, Australia and other countries making good use of this module, there is a health promotion fund where these monies are channelled into,” he explained.

The World Health Organisation (WHO), encourages such taxes; “but the core must be directed towards prevention of diseases and health promotion (health and wellbeing) strategies.  The main idea is to promote healthier lifestyles and preventative measures of diseases,” Dr. Da Costa Aboagye stressed.

As a National Health Insurance Finance expert in the UK, he advised that the government should be mindful of the clear distinction between “health and wellbeing, and ‘healthcare.”

“There are other prudent sustainable ways to finance the NHIS than the current proposal by the NHIA and because the NHIS in Ghana is only medical and treatment focused without any health promotion or wellbeing commitments, advocating for “sin taxes” will be unjustifiable,” he argued.

According to him, it will be a mistake to increase taxes on such products to fund treatments of the resultant diseases than funding prevention of illnesses. He said the implication is that, such businesses would have to either increase the costs of their products, which will then be passed onto consumers, who will then have to consume such products, eventually get sick, before such taxes can be used to treat them.

Dr. Aboagye said, unless the NHIA champions health promotion with funds from the ‘sin tax’, it will be wrong and unjustifiable to advocate for tobacco, sugar and alcohol special taxes.

He suggested that, the new global direction for health care is health promotion (health and wellbeing) and preventative measures, and thus advised the NHIA to take bold steps to fund health promotion and wellbeing activities, with some of its limited resources.

“This will in effect, reduce the NHIS cost burdens in a long term. We must not create a disease –oriented NHIS healthcare system, but a health and wellbeing oriented healthcare where prevention of diseases is key to sustainability of medically financed healthcare like our NHIS.”

Dr. Da Costa Aboagye said since President Akufo-Addo is a co-chair of the Eminent Persons for the United Nations Sustainable Development Goals, it presents the NHIA and the government a huge opportunity to focus on Health and Wellbeing and disease preventative strategies to achieving the Goal 3.

This he said can also serve as a justification for slapping taxes on alcohol, tobacco and sugar, in the national interest.

Dr. Aboagye narrated that the NHIA should rather engage with the Ghana Health Service’s Director General, Dr Anthony Nsiah Asare, and Health Promotion Department to foster synergy on how to make “Sin taxes” justifiable and workable by developing a compressive health promotion strategy and structures to cater for the health and wellbeing of all Ghanaians.

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By: citifmonline.com/Ghana

The post Funding NHIS with tobacco, alcohol taxes won’t prevent diseases – UK Lecturer appeared first on Citi 97.3 FM - Relevant Radio. Always.

The Bill was passed despite stiff opposition from the Minority side, who argued that the passage will not benefit the spare parts dealers as promised by government in the 2017 budget statement.

Speaking to Citi News, the Deputy Minority Leader, James Avedzi, wondered whether the passage will yield the required results, since in his view, no mechanism has been put in place to ensure a corresponding reduction in prices of spare parts to reflect the removal of import duties.

[contextly_sidebar id=”tgWlr79oH86oR9F7bXcwiacqGBnbTcOP”]”The targeted beneficiary who are actually the consumers will eventually not benefit…The Minority is not against it. It is only saying that there must be a mechanism to ensure that the effect is felt by the consumer. The mechanism to ensure that if you go to the market, the importer pays less duty or no duty on the parts at the ports. The mechanism must be put in place to ensure that the price of spare parts reflect that reduction…,” Mr. Avedzi argued.

The Finance Minister, Ken Ofori -Atta in March, announced the abolition of taxes as promised by the Akuffo Addo government.

Mr. Ofori-Atta had explained that, although some of those taxes were introduced by the erstwhile National Democratic Congress (NDC) government to raise revenue, they had proven to be unprofitable means of raising money, and had rather become a burden to the private sector, stifling their development.

Parliament subsequently approved four amendment Bills to scrap the taxes as proposed in the 2017 budget.

The Bills were the Income Tax (Amendment) Bill, Special Petroleum Tax (Amendment) Bill, Special Import (Amendment) Bill and Customs and Excise (Petroleum Taxes and the Petroleum Related Levies (Repeal) Bill.

Below is the list of taxes that have been abolished and reviewed by the government

Abolished

– 1 percent Special Import Levy;

– 17.5 percent VAT/NHIL on financial services;

– 17.5 percent VAT/NHIL on selected imported medicines, that are not produced locally;

– Initiate steps to remove import duties on raw materials and machinery for production within the context of the ECOWAS Common External Tariff (CET) Protocol;

– 17.5 percent VAT/NHIL on domestic airline tickets;

– 5 percent VAT/NHIL on Real Estate sales;

– Excise duty on petroleum; – Special petroleum tax rate from 17.5 percent to 15 percent;

– Duty on the importation of spare parts; – Levies imposed on kayayei by local authorities;

– Taxation, the gains from realisation of securities listed on the Ghana Stock Exchange or publicly held securities approved by the Securities and Exchange Commission (SEC);

Reviewed

– Reduce National Electrification Scheme Levy from 5 percent to 3 percent;

– Reduce Public Lighting Levy from 5 percent to 2 percent;

– Replace the 17.5 VAT/NHIL rate with a flat rate of 3 percent for traders; and

– Implement tax credits and other incentives for businesses that hire young graduates.

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By: Marian Ansah/citifmonline.com/Ghana
Follow @EfeAnsah

The post Parliament passes Bill to scrap taxes on spare parts appeared first on Citi 97.3 FM - Relevant Radio. Always.

The Finance Minister, Ken Ofori-Atta, announced this among other tax cuts in the budget presentation before parliament earlier today [Thursday] in parliament.

The special levy which was introduced in 2017 by the previous government, has received huge backlash from importers, describing it as a nuisance tax.

Speaking to Citi Business News after the announcement, a Member of the Technical Committee for the Ghana Institute of Freight Forwarders, Johnny Mantey, described the news  as a great relief to importers.

“We are very excited and satisfied about the abolition of the special import levy. It is something that we have been looking forward to. That was definitely a nuisance tax which was burdening  the importers so this is indeed very welcoming news,” he said.

He added that the abolition will provide an opportunity for importers to channel their resource into expanding their works.

“Government has shown us that it is not just talking, but they walk their talk.“This is way beyond our expectation” he stressed.

Taxes on imported spare parts; kayayei abolished

The Akufo-Addo government has also abolished import duty taxes on spare parts as it promised during the campaign for election 2016.

The other taxes include the tolls charged head porters, locally known as ‘Kayayei’, who move from the north to the south of Ghana, to engage in all kinds of menial jobs.

List of taxes abolished –

The 1% Special Import Levy

Kayayei market tolls

17.5% VAT/NHIL on financial services

17.5% VAT/NHIL on selected imported medicines that are not produced locally

17.5% VAT/NHIL on domestic airline tickets

Duty on imported spare parts

5% VAT/NHIL on Real estate sales

Exercise duty on petroleum

List of reviewed taxes

– Corporate income tax to be progressively reduced from 25% to 20% in 2018

– Replace 17.5% of VAT/NHIL with 3% flat rate for traders

– Tax credits and other incentives for businesses that hire young graduates from tertiary institutions

–Tax incentives for young entrepreneurs

– Reduce special petroleum tax rate from 17.5% to 15%.

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By: Jessica Ayorkor Aryee/citibusinessnews.com/Ghana.

The post Importers excited over abolition of 1% special import levy appeared first on Citi 97.3 FM - Relevant Radio. Always.

According to the Authority, the taxes and charges shippers are made to pay at the ports, is having a toll on their businesses hence the need for the downward review.

In a Citi News interview at Bolgatanaga during an annual get-together of the Upper East Regional branch of shippers over the weekend, Deputy Chief Executive Officer of the GSA, Sylvia Asana Owu, underscored the need for government’s intervention in the reduction of charges at the ports for exporters and importers.

“The concerns we have received from a lot of shippers in this country has to do with the charges and taxes at the ports. A lot of service providers serve the shippers at the ports. we have the freight forwarders, the shipping lines, the port authorities and even government agencies and invariably most of them end up charging for the services that they provide.”

“If a shipper pays so much in terms of taxes and charges, it will be passed onto the final consumer so if the taxes and charges are reduced at the ports, it will help us and so we are going to work with the Minister for Transport to ensure that these charges are reduced.”

Mrs. Owu admonished shippers to take pragmatic measures in processing the necessary documents for offloading their containers on time at the ports to avoid paying the huge cost on demurrage.

She hinted that, shippers would be sensitized on the WTO Trade Facilitation Agreement and the ‘Rotterdam Rules’ to meet international best practices.

Mrs. Owu swore in Mr. Francis Danso (Chairman) Alhaji Abdul Salaam (Vice chairman) Martin Akogti (Secretary) and Elizabeth Asaana (Treasurer), as the newly elected members of the Upper East Regional Shippers Committee.

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By: Frederick Awuni/Citifmonline.com/Ghana

The post GSA appeals to gov’t for reduction of taxes at ports appeared first on Citi 97.3 FM - Relevant Radio. Always.

To realize this shift from taxation to production, the NPP has targeted the removal or slashing of some taxes, as captured in the infographic below.

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

The post 7 key taxes NPP plans to cut [Infographic] appeared first on Citi 97.3 FM - Relevant Radio. Always.

According to the GRA, the forum is aimed at optimizing revenue mobilization in the country through voluntary compliance.

The forum brought together all tax payers in nine districts along the eastern corridor in the Northern region in Bimbilla in the Nanumba North District.

The Authority believes more Ghanaians will subsequently file their returns and pay their taxes on time so as to reduce its cost of revenue collection.

Mr. Stephen Adomah, the Office Manager for the Yendi STO of GRA, explained that, “we have an income tax law, Act 896 and most of tax payers are not aware of the provisions in the Act and therefore, we are also taking this as an opportunity to educate them on the new Act, so that they will be aware of how and when they are suppose to pay taxes in the new provisions.

He added that “[in] the law, we have several tax laws but this one has consolidated all the tax laws into one and it is tax payer friendly. They can easily be read and understood’.’

He therefore urged tax payers to try as much as possible to comply and voluntarily pay their taxes on time.

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By: Mohammed Aminu M. Alabira/citifmonline.com/Ghana

The post GRA holds public forum on new tax laws appeared first on Citi 97.3 FM - Relevant Radio. Always.