2023 Budget: Government hikes VAT rate by 2.5%; now 15%
Government, has increased the Value Added Tax (VAT) rate by 250 percentage points from the current 12.5% to 15%.
Making the disclosure on the floor of Parliament during the presentation of the 2023 Budget Statement, the Minister for Finance, Ken Ofori-Atta, noted the 2.5% increment in the VAT rate is to directly support government’s road construction and digitalization agenda.
“Mr. Speaker, we will undertake the following actions, initiatives and interventions under the seven point agenda which means to aggressively mobilise domestic revenue that includes; increasing the VAT rate by 2.5% to directly support our roads and digitalisation agenda.
“Fast-tracking the implementation of the Unified Property Rate Platform programme in 2023; and review the E-Levy Act and more specifically, reduce the headline rate from 1.5% to one percent (1%) of the transaction value as well as the removal of the daily threshold,” the Minister stated.
Given the fact that VAT is a consumption tax, increment in the tax implies increased cost of goods and services for consumers.
Value Added Tax (VAT) is a tax applied on the value added to goods and services at each stage in the production and distribution chain. It forms part of the final price the consumer pays for goods or services.
The 2023 Budget Statement presented on the floor of Parliament on, Thursday, November 24, 2022, focused on government’s strategies to restore and stabilise the country’s macro economy.
Aside that, the 2023 Budget Statement, seeks to build resilience and promote inclusive growth and value creation in the economy.
The 2023 budget featured updates on Ghana’s engagement with the IMF for an IMF-supported Programme; year-to-date macro-fiscal performance of the economy; the YouStart initiative under the Ghana CARES Programme; climate action strategies; fiscal measures and debt management strategies aimed at ensuring fiscal and debt sustainability and promoting growth.
Source: norvanreports
