Government has indicated that it will streamline the country’s tax regime to prevent large companies from abusing tax exemptions.
With Ghana losing about five percent of its Gross Domestic Product (GDP) annually due to excesses in taxes of companies operating in the free zone, government says it is putting in place measures to handle wasteful tax exemptions.
Minister of Finance, Ken Ofori-Atta who said this in his presentation of the 2022 budget statement and economic policy to Parliament on Wednesday, November 17, 2021, said government through the Exemptions Bill which will be laid in the house in 2022 will trim down wasteful tax exemptions to ensure the country gain significant returns from companies enjoying tax exemptions.
“We wish to reiterate that we are in challenging times, which require radical measures, so let us embrace these new policies to enable Government to address the fundamental issues affecting the economy, to ensure that, our Nation continues to maintain its position,” he said.
More Reliefs for Textile Industry
The Minister also announced a two-year extension of the Value Added Tax (VAT) relief on African prints for textile manufacturers in the country. According to him, the extension is to enable them to resuscitate their operations and provide affordable textiles to the market.
Limiting of VAT flat rate to retailers
Mr. Ofori-Atta also indicated that the 3 percent VAT flat rate on the supply of goods by wholesalers and retailers which was introduced in 2017 will now be limited to only retailers explaining that all other supply of goods and services will attract the standard rate.
This the Minister explained that the object of the flat rate is to provide a simplified system for small scale enterprises noting that to ensure that this objective is achieved, the rate will be applied to retailers with annual turnover not exceeding GH¢500,000. All other retailers and wholesalers will charge the standard rate.
