By Godwill Arthur-Mensah, GNA
Accra, March 2, GNA - The Government, in presenting the 2017 Budget Statement, announced comprehensive tax reliefs for businesses and industries intended to enhance production and create wealth for the citizenry.
Mr Ken Ofori-Atta, the Minister of Finance, who presented the Financial Policy Statement on the floor of Parliament on Thursday, said it would abolish duty on the importation of spare parts.
He said levies imposed on kayayei by local authorities as well as the one per cent Special Import Levy and the 17.5 per cent VAT/NHIL on financial services would be scraped as part of government’s commitment to re-energize the private sector.
Other taxes and levies that would be scraped are the 17.5 per cent VAT/NHIL on selected imported medicines that are not produced locally, the 17.5 per cent VAT/NHIL on domestic airline tickets, the five per cent VAT/NHIL on Real Estate sales and the excise duty on petroleum products.
Mr Ofori-Atta said government would also reduce the special petroleum tax rate from 17.5 per cent to 15 per cent, reduce the National Electrification Scheme Levy from five per cent to three per cent, reduce Public Lighting Levy from five per cent to two per cent, replace the 17.5 VAT/NHIL rate with a flat rate of three per cent for traders and implement tax credits and other incentives for businesses that hired young graduates.
The minister expressed optimism that with the right policy interventions, it would set the stage for job-creation opportunities, ease hardships and secure a brighter future for businesses, industries and the entire populace.
He outlined some medium to long-term interventions including removing import duties on raw materials and machinery for production within the ECOWAS Common External Tariff Protocol.
Mr Ofori-Atta said whilst the Government's focus was on reducing taxes to enhance production, it was determined to tackle the systemic abuse in the exemptions regime.
‘‘There shall be a comprehensive review of the regime on import duty exemptions and tax reliefs with a view to eliminating abuses and improving efficiency in the applications of these incentives,’’ he said.
To this end, he said, the review would cover, among other things, the import duties, taxes and levies payable by Ministries, Departments and Agencies and other government departments, import duties and all forms of taxes and levies payable by both domestic and foreign companies, suppliers and contractors executing projects and contracts in the country.
He said import duties and all forms of taxes and levies payable by employees would also be reviewed as well as directors and senior officials of both domestic and foreign companies, import duties and all forms of taxes and levies payable by both domestic and foreign companies, investors and non-governmental and charity organisations.
Mr Ofori-Atta said the Government believed in empowering the local enterprises and private sector, therefore, it would pass a legislation to ensure that at least 70 per cent of all government projects and procurement executed by local corporations and enterprises be set aside for entities owned by women, persons with disability, as well as those established under the Youth Enterprise Fund.
He said government would introduce and enforce the local content policy for government projects and procurement with the focus on job creation and value addition as well as enhancing the employable skills of the people.
To ensure the success of the policy, he said the Government would, among other things, require a job impact analysis of all qualifying projects and other local value addition that must pass strict criteria established by government under the Legislative Instrument LI 2204, promulgated in 2013.
‘‘All public-sector projects, whether it is executed by the public-sector or the private-sector, contractors must undergo a job impact assessment to evaluate the potential job creation impact. This will enable Government to analyse how various jobs are being created so as to better structure incentives and stimuli for higher skill jobs and opportunities for Ghanaians,’’ Mr Ofori-Atta said.
He said those policy initiatives would improve the business environment, ensure fiscal discipline and promote investment in critical infrastructure, especially in rural and deprived communities.