President Nana Addo Dankwa Akufo-Addo has said he is determined to create prosperity and higher income for Ghanaians by building a viable private sector in the Ghanaian economy.
According to him, ensuring a buoyant private sector in Ghana has been the principle of his government, hence the necessary measures including the removal of some taxes have been taken.
Speaking in an interview with GTV, Mr Akufo-Addo said: “Most of the funding is coming from the consolidated fund and the consolidated fund is going to grow, it will not shrink because of the measures with the taxes, the measures that we have taken to remove what is now known in political lexicon as nuisance taxes.
“What you have to get your mind around is that we are staking the fortunes of our government on a simple principle that if we can provide the stimulus that will allow the private sector to grow, that is the way we can create prosperity and create jobs and create higher and higher income levels.”
It is recalled that during the reading of the maiden budget statement of this government in Parliament by Finance Minister Ken Ofori-Atta, he announced among other things, the scrapping of excise duty on petroleum products. The government also intends to reduce the special petroleum tax rate on petrol from 17.5% to 15%.
Other taxes that will be completely abolished include the following:
1. The 1% special import levy
2. The 17.5% VAT on financial services
3. The 17.5% VAT on selected imported medicines not produced locally
4. The 17.5% VAT on domestic airline tickets
5. The 5% VAT on real estate sales
6. Duty on importation of spare parts
Also, the 17.5% VAT imposed on traders has been replaced with a 3% flat rate, while businesses that employ young graduates from tertiary institutions will get tax credits and other incentives. Furthermore, there will be tax incentives for young entrepreneurs while the Corporate Income Tax will be progressively reduced from 25% to 20% in 2018.
Additionally, Mr Ofori-Atta said the Akufo-Addo government would initiate steps to remove import duties on raw materials and machinery for production.
Parliament has since approved the budget.