Finance Minister , Ken Ofori Atta has said that the government wishes to increase the country’s Value Added Tax (VAT) by 2.5 percent in 2023
This was said by the Finance Minister while presenting the country’s 2023 budget to Parliament on Thursday, November 24, 2022.
The standard VAT rate is 12.5%, except for supplies made by a wholesaler or reseller of goods, which are taxed at a total flat rate of 3%. He also stated that the government will implement massive structural reforms in the public sector.
Concerning economic challenges, he told Parliament that the government was determined to change the narrative after admitting that the economy was in crisis.
“The government is determined to change the negative narrative and rebuild for a better future,” he said.
Meanwhile, Mr Ofori-Atta also revealed that the government will drop the controversial and burdensome Electronic Transactions Levy (E-Levy) from 1.5% to 1% and lower the threshold from GHC 100 per transaction.
According to him, the move is among steps that the government aims to implement in order to turn the economy around and alleviate the extreme economic hardship that Ghanaians are now experiencing.
The tax, which many analysts have labeled as regressive, was supposed to raise at least GH6.9 billion, but the figure had to be revised to around GH4.9 billion due to the delay in the passage of the e-levy bill. After failing to meet the GH1.46 billion target for the first half of the year, the government was required to lower the tax measure to GH611 million.
Furthermore, the Ghana Revenue Authority (GRA) has disclosed that the e-levy has generated 328 million cedis (GH328m) thus far.
Meanwhile, since last month, Ken Ofori Atta is on the verge of losing his position as an MP after many Ghanaians protested against him for being inactively and embezzling the country’s money.
In response to the Finance Minister’s sacking protest, Akufo Addo backed Ken Ofori for the excellent work he has done since being elected to office under the NPP administration.