The Finance Minister has said that the government wishes to increase the country’s Value Added Tax (VAT) by 2.5 percent in 2023.
According to him, the proposal to increase the rate forms part of the government’s seven-point agenda to revitalize the economy.
The Finance Minister said this while presenting the country’s 2023 budget at Parliament on Thursday, November 24, 2022.
The standard VAT rate is 12.5%, except for supplies of a wholesaler or retailer of goods, which are taxed at a total flat rate of 3%.
He also announced that the government will undertake major structural reforms in the public sector.
Regarding the economic challenges, he told Parliament that the government was determined to change the narrative after admitting that the economy has been going through troubles.
“The government is determined to change the negative narrative and rebuild for a better future,” he said.
Meanwhile, Mr Ofori-Atta has revealed that the government will reduce the controversial and burdensome Electronic Transactions Levy (E-Levy) from the current 1.5% to 1% and also reduce the threshold from GHC 100 per transaction.
According to him, the move is one of the various initiatives the government intends to roll out to turn the economy around and lessen the severe economic hardship that Ghanaians are currently going through.
At least GH₵6.9 billion was expected to be raised from the tax that many analysts have described as regressive, but the figure had to be revised to about GH₵4.9 billion following the delay in the passage of the e-levy bill. Having missed the GH₵1.46 billion target for the first half of the year, the government had to revise the tax measure downwards, again, to GH₵611 million.
Also, the Ghana Revenue Authority (GRA) has disclosed that three hundred and twenty-eight million cedis (GH¢328m) have been realized so far from the e-levy.