In a significant announcement, Minister for Finance, Ken Ofori-Atta, in the presentation of the 2024 budget, has announced a comprehensive set of tax reliefs for businesses and the citizenry.
These measures, aimed at both businesses and the general populace, signify a strategic move to stimulate economic growth and alleviate financial burdens. The Minister attributed the tax reliefs to ongoing commitment by government to provide substantial relief to the private sector amidst expenditure pressures.
The tax reliefs as outlined by Mr. Ofori-Atta cover a diverse range of items, showcasing a comprehensive approach to addressing economic challenges.
The unveiling of these measures underscores the government’s dedication to creating a supportive economic environment, particularly for the private sector, which has been facing various expenditure pressures.
“Mr. Speaker, our approach to tax policy since 2017 was to give significant relief to the private sector until expenditure pressures from 2020 required a more aggressive approach. It is important to note that in the short-term, fiscal sustainability requires that we improve our tax ratios significantly otherwise, our long-term competitiveness will be eroded. As we all know, our country’s 13 percent tax-to-GDP ratio is far below our peers. Our target is 18-20% and we are on course.
“In that regard, it is difficult to implement all the structural reforms and tax reliefs needed to immediately lower and/or eliminate certain tax handles. However, I assure this August House, that we have heard, we believe in lower taxes for industry, and we are working at this aggressively with the GRA and to be cemented with the standing committee of the Mutual Prosperity Dialogue.”Ken Ofori-Atta
For businesses, the unveiled tax reliefs encompass a spectrum of areas, ranging from corporate income tax adjustments to incentives for strategic investments. These measures are poised to empower businesses to expand, invest, and contribute more robustly to the economic landscape.
The List of the Tax Reliefs Announced
Meanwhile, the list of the tax reliefs announced by the Finance Minister include: Extend zero rate of VAT on locally manufactured African prints for two (2) more years; Waive import duties on import of electric vehicles for public transportation for a period of 8 years; Waive import duties on semi-knocked down and completely knocked down Electric vehicles imported by registered EV assembly companies in Ghana for a period of 8 years; Extend zero rate of VAT on locally assembled vehicles for 2 more years; Zero rate VAT on locally produced sanitary pads.
The rest are: Grant import duty waivers for raw materials for the local manufacture of sanitary pads; Grant exemptions on the importation of agricultural machinery equipment and inputs and medical consumables, raw materials for the pharmaceutical industry; A VAT flat rate of 5 percent to replace the 15 percent standard VAT rate on all commercial properties will be introduced to simplify administration.
As the nation grapples with economic recovery in the aftermath of global challenges, the strategic deployment of tax reliefs emerges as a powerful tool for economic rejuvenation. By stimulating both business growth and individual financial resilience, these measures aim to create a more inclusive and sustainable economic trajectory.
The Finance Minister’s announcement comes at a crucial juncture, aligning with the government’s broader economic vision and commitment to responsible fiscal management. The unveiling of these tax reliefs is anticipated to have a positive ripple effect, fostering a climate of economic optimism and confidence.