Gov’t Removes Taxes on Imported Spare Parts, Kayayei

Gov’t Removes Taxes on Imported Spare Parts, Kayayei

The Akufo-Addo government has abolished import duty taxes on spare parts as it promised during the campaign for election 2016.

The Minister of Finance, Ken Ofori Atta, announced the removal of this among others the government considers “nuisance taxes” to promote growth in the private sector.

They include the tolls charged head porters locally known as ‘Kayayei’ who move from the north to the south of Ghana to engage in several menial jobs.

Ken Ofori Atta made the announcement, while delivering to Parliament the 2017 budget statement and economic policy on Thursday, March 2, 2017.

He noted that, although some of the taxes were introduced by the erstwhile National Democratic Congress (NDC) government to raise revenue, they have proven to be unprofitable means of raising money, and had rather become a burden to the private sector, stifling their development.

“A number of tax measures have been introduced in recent years in an attempt to deal with revenue shortfalls. Some have proven to be nuisance taxes. They have no revenue yielding potential, and at the same time impose a significant burden on the private sector and on the average Ghanaian citizen. As part of our commitment to re-energize the private sector, the government has decided, as pledged, to review these taxes to provide relief for business. ”

List of taxes abolished

– The 1% Special Import Levy

– Kayayei market tolls

– 17.5% VAT/NHIL on financial services

– 17.5% VAT/NHIL on selected imported medicines that are not produced locally

– 17.5% VAT/NHIL on domestic airline tickets

– Duty on imported spare parts

– 5% VAT/NHIL on Real estate sales

– Exercise duty on petroleum

List of reviewed taxes

– Corporate income tax to be progressively reduced from 25% to 20% in 2018.

– Replace 17.5% of VAT/NHIL with 3% flat rate for traders

– Tax credits and other incentives for businesses that hire young graduates from tertiary institutions

– Tax incentives for young entrepreneurs

– Reduce special petroleum tax rate from 17.5% to 15%.

By: Jonas Nyabor/citifmonline.com/Ghana

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