Government through the 2023 Budget Statement and Economic Policy is seeking to intensify efforts at mobilizing domestic revenues to help finance its transformative agenda and help build back the Ghanaian economy from the ravages of the Coronavirus pandemic and the adverse effects of the geopolitical tension between Russia and Ukraine.
Finance Minister, Ken Ofori-Atta made this known during the presentation of the
2023 Budget Statement and Economic Policy in Parliament on Thursday, November
23, 2022.
With dwindling revenue streams attributable to a slowdown in business
activities occasioned by a global recession, Ghana is behind most of its peers
within the West African sub-region as far as Tax to Gross Domestic Product
(GDP) is concerned. While Ghana is doing below 15 per cent, countries in the
sub-region like Cote d’ivoire and Nigeria are hovering around an average of 18
per cent.
This Minister Ofori-Atta in his budget presentation explained has led
government to expand the tax net and implement tax efficient measures to
increase its revenue streams and shore up government finances.
One of such revenue measures he said is the introduction of a common platform
for property rate administration to enhance property rate collection by all
Metropolitan, Municipal and Districts Assemblies (MDAs) in the country.
He said property rates have the potential to increase revenue mobilization for
MMDAs and release resources for the provision of basic infrastructure as well
as the needs of the generality of Ghanaians at the local level.
Mr. Ofori-Atta also indicated government plans of increasing the Value Added
Tax (VAT) by two and half percentage point. The VAT, which was last increased
in 2014, coincidentally when Ghana was under a Fund programme will now be set
at 15 per cent.
“Mr. Speaker, the demand for roads has become the cry of many communities in
the country. Unfortunately, with the current economic difficulties and the
absence of a dedicated source of funding for road construction, it is difficult
to meet these demands. In that regard, we are proposing the implementation of
new revenue measures. The major one is an increase in the VAT rate by 2.5
percentage points,” he said.
Explaining the rationale behind the increment, the Finance Minister said this
would enable the country to raise resources to build the economy back to its
pre-COVID-19 levels as cost of borrowing to finance government expenditure has
become increasingly expensive.
Source: Peacefmonline.com/Ghana