January 1 slated as implementation date for 7 tax amendments
The Ghana Revenue Authority (GRA) has officially slated January 1, 2024, as the commencement date for a sweeping tax reform, following the parliamentary passage and presidential assent of seven crucial tax amendments.
Outlined in a circular disseminated by the GRA, these tax act amendments are poised to reshape the country’s fiscal landscape.
In a bid to enhance transparency, the GRA pledges to develop comprehensive administrative guidelines and issue necessary notices for the seamless implementation of the proposed changes. Furthermore, the authority underscores that payroll deductions for January 2024 must align with the modified rates specified in the recently enacted Income Tax (Amendment).
President Akufo-Addo, on December 29, 2024, signed into law seven pivotal tax bills, each carrying significant implications for businesses and individuals alike.
They are: Value Added Tax (Amendment) Bill, 2023; Excise Duty (Amendment) (No. 2) Bill, 2023; Stamp Duty (Amendment) Bill, 2023; Emissions Levy Act, 2023; Exemptions (Amendment) Act, 2023; Customs Amendment Act 2023 and Income TAX Amendment Act 2023.
The Value Added Tax (Amendment) Bill, 2023, is seeking to broaden the tax net and introduce exemptions on locally manufactured products. Notably, a zero rate is to be applied to domestically produced sanitary towels, while the VAT on imported electric vehicles for public transportation is set to be waived.
The Excise Duty (Amendment) (No. 2) Bill, 2023, ushers in changes to excise duty rates on select beverages to align with beer rates, alongside a reduction in excise duty on plastics. Furthermore, the coverage of excise duty on imported plastic packaging is expanded, showcasing a nuanced approach to environmental considerations.
In a move with potential ramifications across sectors, the Emissions Levy Act, 2023, introduces levies on carbon dioxide equivalent emissions from specified industries and internal combustion engine vehicle emissions. The levy structure encompasses varying charges for the construction, manufacturing, mining, oil and gas, electricity, and heating sectors.
Government sources project that these tax reforms may yield an excess of GHS 5 billion in revenue for 2024. However, concerns are emerging over the potential knock-on effects on the cost of living, particularly in the form of a projected 30% surge in motor insurance premiums.
As Ghana embraces these ambitious tax changes, stakeholders keenly observe the delicate equilibrium between revenue generation imperatives and the socio-economic impact on citizens and businesses alike.
