The Ghana Revenue Authority, GRA, has begun the implementation of six tax reliefs as part of government’s efforts to cushion Ghanaians/taxpayers against the Covid -19 pandemic and its dire effects on the economy.
According to the government, these reliefs will also boost the efforts of small and medium sized businesses.
The new reliefs include; the exemption of people whose annual incomes are up to GH¢4,500 or GH¢375 a month from paying taxes, as well as the suspension of the payment of Vehicle Income Tax on selected vehicles, including intercity commercial vehicles and intercity/long-distance buses.
The GRA will also limit the application of the flat rate Value Added Tax scheme to businesses whose annual income is up to GH¢500,000.
Government will also waive the interest and penalty on tax arrears for all categories of taxpayers. GRA will further reduce withholding tax on gold exports by small-scale miners by 50%, and the exemption of local textile manufacturers from paying VAT.
The implementation of these reliefs have become possible because Parliament has successfully passed the relevant legislation in December 2021.
The GRA is of the belief that by granting these reliefs, the government would encourage individuals and firms to fulfill their tax obligations.
Meanwhile, the Ghana Revenue Authority hopes to raise the market share of domestic manufacturers from the current 20 to 50 percent by 2025 through these new reliefs.
The Government of Ghana has also suspended 20 percent expenditure in the 2022 Budget
Parliament has already approved government’s total expenditure for 2022, but the government, in a prudent fiscal consolidation move, has decided to cut down on its expenditure, up to a whopping 20%.
Finance Minister, Ken Ofori Atta said the expenditure management by government, is expected to continue from this year and beyond, in the midst of the global impact of Covid-19 on economies.
“To ensure that the government matches all expenditure to revenue inflows, all expenditure commitments in 2022 will be be adjusted to match revenue collection,” the Finance Minister announced.