2023 Budget: Government increases VAT rate from 12.5% to 15%

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The decision to raise the Value Added Tax (VAT) by 2.5 percent has been announced by the government.

This will raise the tax rate from its existing level of 12.5% to 15.0%.

The Finance Minister stated that the review will directly help the digitalization agenda and road development projects when he presented the 2023 budget to Parliament on Thursday.

The decision to raise the Value Added Tax (VAT) by 2.5 percent has been announced by the government.

Ken Ofori-Atta claims that the upward adjustment is a government policy “to aggressively mobilize domestic revenue.”

Among others, the Minister said government will fast-track the implementation of the Unified Property Rate Platform programme in 2023.

He also revealed that the E-Levy Act will be reviewed.

“The headline rate from 1.5% will be reduced to one percent (1%) of the transaction value as well as the removal of the daily threshold,” he divulged.

“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,” Ofori-Atta stated.

In other words, the restriction that only transactions that total more than GHC 100 per day qualify for E-Levy deductions would be lifted.

So, even if you send only GHC 5, GHC 1, or GHC 50, E-Levy will be applied.

In March 2022, the Electronic Transfer Fee Act, 2022 (Act 1075), which levies a 1.5% levy on electronic transactions, was controversially enacted.

The fee was reduced from the previously intended 1.75% to 1.5 percent.

Source: Ghanatodayonline.com

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