New taxes have been introduced in the 2021 budget statement presented to parliament by Majority Leader, Oei Kyei-Mensah-Bonsu on March 12, 2021.
The budget was presented on behalf of the Minister of Finance, Ken Ofori-Atta who is out of the country to seek medical attention.
The budget statement amongst others announced new taxes and the review of other existing taxes to aid in the recovery of the economy as outlined in the Budget Statement yesterday.
“Mr Speaker, Government recognizes that as a result of the impact of COVID19, times are hard for many of our people.”
“However, it is important that we rebuild and strengthen our public finances to provide the resources to protect the lives and livelihoods of Ghanaians, deliver critical Government services and support the transformation of the economy. It will also ensure fiscal and debt sustainability.”
“We have to do this ourselves as no one will do it for us. Rebuilding our public finances requires us to implement some important fiscal measures to mobilize additional domestic revenue,” Osei Kyei-Mensa-Bonsu said.
Below Are The Taxes Introduced In The 2021 Budget
1, THE 1% VAT HEALTH LEVY (COVID-19 Health Levy)
According to the Budget Statement, the COVID-19 pandemic has had a huge toll on the nation’s finances thus Ghanaians need to pay a COVID-19 Health Levy.
Per the explanation, the government had to buy PPEs, Vaccines, Supply Free Foods etc and all these have increased the nation’s financial burden.
Osei Kyei-Mensah-Bonsu said: To provide the requisite resources to address these challenges and fund these activities, the Government is proposing the introduction of a COVID-19 Health Levy of a one percentage point increase in the National Health Insurance Levy and a one percentage point increase in the VAT Flat Rate to support expenditures related to COVID-19.
2, Sanitation and Pollution Levy (SPL)
According to the 2021 Budget Statement, the government is introducing a new tax called the Sanitation and Pollution Levy (SPL) to cushion the fight against filth.
Per the explanation, the government has invested hugely in Sanitation by providing toilets, drainage systems and landfill sites all in a bid to make Accra and Ghana the cleanest city and country in Africa respectively, therefore, Ghanaians need to support that effort.
Osei Kyei-Mensah-Bonsu said: Mr Speaker, these are all very critical investments that have to be made for the benefit and dignity of all Ghanaians. These will ensure sustainable sanitation management, improve the quality of life and reduce the number of deaths and
diseases from poor sanitation.
To provide the requisite resources to address these challenges and fund these
activities, the Government is proposing a Sanitation and Pollution Levy (SPL) of 10 pesewas on the price per litre of petrol/diesel under the Energy Sector Levies Act (ESLA).
3, Energy Sector Recovery Levy (Delta Fund)
The 2021 Budget Statement saw the government review the Energy Sector Recovery Levy (Delta Fund) which was reduced from 17.5 per cent to 13 per cent in 2017 -2018.
According to the statement, the government is currently in a financial quagmire and thus it has become necessary to fr the tax which was reduced to be reviewed and adjusted.
Osei Kyei-Mensah-Bonsu said: Despite the substantial progress made by the Akufo-Addo Government, there is the need to find additional resources to cover the excess capacity charges that have resulted from the Power Purchase Agreements (PPAs) signed by the previous Government which required payments for capacity charges even when the plants
involved were idle or unutilised.
Mr Speaker, it has become very necessary for the Government to consider a review of the energy sector levies. The Energy Sector Recovery Levy of 20 pesewas per litre on petrol/diesel under the ESLA is hereby submitted to this House for approval.
Mr Speaker, Government will, therefore, introduce a financial sector clean-up
levy of 5% on profit-before-tax of banks to help defray outstanding commitments in the sector. The levy will be reviewed in 2024.
4, Road Tolls
The government also said, through the 2021 Budget Statement, that Road Tolls will be reviewed upward to help the government in maintaining these roads.
According to the statement, the fees (Miscellaneous Provisions) Act, 2018 (Act 983) that governs the setting of Rates and Tolls will be reviewed in 2021 to allow for upward adjustments.
Osei Kyei-Mensah-Bonsu said: Mr Speaker, to maintain the improvements on our roads, Government will review existing road tolls and align them with current market rates. This will form part of the framework for promoting burden-sharing as we seek to transform our road and infrastructure sector in a post-COVID era.
Furthermore, in 2021, we will amend the fees (Miscellaneous Provisions) Act, 2018 (Act 983) that governs the setting of Rates and Tolls to accommodate an automatic annual adjustment that will be pegged to the previous year’s average annual inflation as published by the Ghana Statistical Service”.
5, Gaming Policy
The 2021 Budget Statement also outlined the plan imposition of tax on Sports Betting and Gaming in Ghana.
According to the statement, there is an influx of online sports betting in Ghana therefore, the government is going to tax these money-making activities.
Osei Kyei-Mensah-Bonsu said: Mr Speaker, gaming has become a major income earner all across the globe and a significant source of Government revenue. The influx of online betting and automation of the once totally manual process has changed the character of revenue sources from that industry.
It is estimated that Ghana loses over GHs 300 million annually in revenue due to leakages in the sector. The Ministry of Finance and the Ministry for the Interior will co-supervise the gaming industry and will soon consult with stakeholders to formulate a comprehensive policy to improve revenue mobilization from this source.
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