Government scraps taxes on locally-produced sanitary pads, African prints

Certain tax breaks on sanitary pads and other locally produced goods have been announced by Finance Minister Ken Ofori-Atta.

“Mr. Speaker, our tax policy strategy since 2017 has been to provide the private sector with substantial relief until 2020 spending pressures necessitated a more aggressive strategy. When he submitted the 2024 budget to the parliament on Wednesday, November 15, 2023, he stated, “It is important to note that in the short-term, fiscal sustainability requires that we improve our tax ratios significantly; otherwise, our long-term competitiveness will be eroded.”

But Mr. Ofori-Atta drew attention to the fact that “as we all know, our country’s 13% tax-to-GDP ratio is far below our peers.” We are on target to achieve our goal of 18–20%.

“In that regard, it is difficult to implement all the structural reforms and tax reliefs needed to immediately lower and/or eliminate certain tax handles. However, I assure this August House, that we have heard, we believe in lower taxes for industry, and we are working at this aggressively with the GRA and to be cemented with the standing committee of the Mutual Prosperity Dialogue”, he said.

Mr Ofori-Atta, thus, announced the following tax reliefs that have been “prioritised for implementation”:
i. Extend zero rate of VAT on locally manufactured african prints for two (2) more years;

ii. Waive import duties on import of electric vehicles for public transportation for a period of 8 years;

iii. Waive import duties on semi-knocked down and completely knocked down Electric vehicles imported by registered EV assembly companies in Ghana for a period of 8 years;

iv. Extend zero rate of VAT on locally assembled vehicles for 2 more years;

v. Zero rate VAT on locally produced sanitary pads;

vi. Grant import duty waivers for raw materials for the local manufacture of sanitary pads;

vii. Grant exemptions on the importation of agricultural machinery equipment and inputs and medical consumables, raw materials for the pharmaceutical industry;

viii. A VAT flat rate of 5 per cent to replace the 15 per cent standard VAT rate on all commercial properties will be introduced to simplify administration.

He said to address the “negative externalities of plastic waste and pollution, the government will review and expand the Environmental Excise Duty to cover plastic packaging, and industrial and vehicle emissions”.

Also, he said the Stamp Duty Act, 2005 (Act 689) has not been reviewed since its enactment in 2005. “To realign the rate with current economic realities, Government, in 2024, will review the rates and fees for stamp duties. The bands subject to ad valorem taxes will be expanded while the specific rates will be reviewed upwards”.

He notified the house that a “simplified tax return will be introduced as a means of promoting voluntary compliance as part of the modified taxation scheme for individuals in the informal sector. This approach will make it easier for taxpayers to fulfil their tax obligations to the State”.

Source: Ghanatodayonline.com