Home | Goldstreet Business
Tuesday, May 30, 2023
  • Home
  • General News
    • Extractives
    • Auto
  • Business
    • Banking and Finance
    • AgriBusiness
    • Insurance
    • Mining
    • Oil and Gas
    • Real Estate/Housing
  • News
    • Top Stories
    • Agriculture
    • Maritime/Aviation
    • Energy
    • Education
    • Construction
  • Technology
    • ICT
    • Telecom
  • World
    • Africa
    • International
  • Editorial/Features
  • GSB Data Services
No Result
View All Result
  • Home
  • General News
    • Extractives
    • Auto
  • Business
    • Banking and Finance
    • AgriBusiness
    • Insurance
    • Mining
    • Oil and Gas
    • Real Estate/Housing
  • News
    • Top Stories
    • Agriculture
    • Maritime/Aviation
    • Energy
    • Education
    • Construction
  • Technology
    • ICT
    • Telecom
  • World
    • Africa
    • International
  • Editorial/Features
  • GSB Data Services
No Result
View All Result
Gold Business Logo
No Result
View All Result
Home Business Economy

Budget 2021: The new taxes and what it means to your pocket

March 22, 2021
in Economy, General News
0
Share on FacebookShare on Twitter

The 2021 budget, themed “Completion, Consolidation, and Continuation” and presented by the interim Finance Minister Osei Kyei-Mensah Bonsu to the House of Parliament revealed a list of new tax policies and revisions of existing ones which will impact the finances of individuals and businesses.

Stemming from the unprecedented rise of the coronavirus pandemic and its associated harsh realities to economic life, such as the ballooning of the public debt to GHc291.6 billion, stretching of the health budget beyond the annual target, and impacting the fiscal economy to the tune of GHc19.7 billion, the government plans to introduce the following taxes to help in rebuilding the economy.

RELATED POSTS

Government expecting $1.2bn in IMF disbursement for 2023 –Dr Adam

Cedi to end 2023 at ¢12.40 to a dollar – Fitch Solutions

  • A one percentage point increase in the National Health Insurance Levy and a one percentage point increase in the VAT Flat Rate.
  • An Energy Sector Recovery Levy of 20 pesewas per litre on the price of petrol and diesel. 
  • A Sanitation and Pollution Levy of 10 pesewas per litre of petrol and diesel.
  • Revision of road tolls
  • A financial sector cleanup levy of 5% on profit-before-tax on banks
  • Introduction of new gaming policy
  • Revision of road tolls.

Budget 2021- VAT and NHIL

“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,” read the 2021 budget by Osei Kyei-Mensah Bonsu.

He mentioned that these expenditures include among other things, vaccine procurement, the establishment of 14 medical waste facilities, implementation of 33 health projects, support of the Agenda 111 initiative, and recruitment of health care professionals.

Purpose of the levy

The purpose of the levy, according to Osei Kyei-Mensah Bonsu is not only to support the above-listed projects but to support COVID-19 related expenditures. 

The minister further stated that the fiscal impact of the coronavirus pandemic on the Ghanaian economy was Ghs19.7 billion with the budget designated to health far exceeding the annual health budget. This levy will thus help mitigate the effect.

Impact on individuals, businesses, and government 

Ghana’s tax composition include:

  • The standard VAT rate of 12.5%, except for supplies of a wholesaler or retailer of goods, which are taxed at a total flat rate of 3%. 
  • The National Health Insurance Levy (NHIL) of 2.5% levy on goods and services collected under the Value Added Tax (VAT). It’s worthy to note that the NHIL largely funds the National Health Insurance Scheme.
  • The GetFund Levy of 2.5%.

The government plans to increase the VAT flat rate and NHIL by one percentage point which will mean an increase in the VAT flat rate from the current 3% to 4% while that of the NHIL will increase from 2.5% to 3.5%. 

An important impact on the rise in the levy on VAT and NHIL will be an increase in retail prices should suppliers opt to pass the increment to consumers. Should suppliers pass the increment to buyers/consumers, there will be a reduction in the purchasing value of the money consumers hold hence, increasing consumer expenditure.

For instance, a good that could be supplied at a cost of GHS40.00 will now cost GHS41.6 when the VAT flat rate of 4% is applied.

With respect to the government, the increment would increase its revenue base and aid in lowering its fiscal deficit and thus help contribute to lowering the National debt. 

Budget 2021 – Energy Sector Recovery Levy and Sanitation Levy.

The government plans to introduce the Energy Sector Recovery Levy of 20 pesewas per litre on the price of petrol and diesel. The government also plans to introduce a Sanitation and Pollution Levy of 10 pesewas per litre of petrol and diesel.

The Energy Sector Recovery Levy has been necessitated “due to the difficulties faced by our economy arising from higher excess capacity payments in the energy sector, which have not yet reflected in electricity tariffs.”

The Sanitation and Pollution levy is also being introduced to ensure “sustainable sanitation management, improve the quality of life and reduce the number of deaths and diseases from poor sanitation.”

According to the interim Finance Minister, given existing world crude oil prices, the implementation of the proposed levies as well as to pay for excess capacity charges will result in a 5.7% increase in petroleum prices at the pump.

What it means for your pocket

Currently, fuel prices average around GHS5.36 per litre. Given the introduction of the levies which will see a 5.7% rise in petroleum prices, Ghanaians must expect to pay more for fuel at the price of GHS5.67 per litre and since our transportation system is heavily reliant on fuel, transport operators will pass on the extra charges that they pay for fuel to consumers thereby increasing consumer expenditure.

Moreover, with the increase in transport fares, food producers/distributors and middlemen who transport food items from the hinterlands and neighbouring countries will also pass on the extra charges they pay in transporting such food items to the consumer. This will lead to further increases in the prices of food items, thereby increasing the expenditure of consumers. 

Budget 2021- Financial sector cleanup levy

From mid-2017 to end-December 2018, The Bank of Ghana embarked on a banking sector clean-up, recapitalization, and other regulatory reforms to promote the safety, soundness, and stability of the financial system to support economic growth. 

During the cleanup, there was a crackdown on poor business practices and weak capital positions in the sector. It subsequently led to hundreds of license withdrawals, some mergers, and exits from the sector. 

The aftermath of BoG’s exercise has led to a fewer number of well-capitalized banks and microfinance institutions. The financial sector is now in good health. This is evident in some key metrics like total assets and deposit growth. For instance, deposit growth moved from 12.7% in 2017 to 17.3% and 22.2% in 2018 and 2019 respectively. 

The budget stated that the financial sector mop-up cost the government GHS21 billion. To “defray outstanding commitments” stemming from the cleanup, the government will be imposing a 5% levy on the profit of banks before tax is deducted. This means commercial banks will have to make provision for the levy in their accounting books which will impact the overall net profit of commercial banks.

Road toll 

In 2019, the Sector Minister of the Ministry of Roads and Highways, Amoako Attah, called for the increment of road tolls to enhance revenue mobilization. According to him, after a survey, his Ministry became aware of the fact that “we are losing a minimum of 40%, maximum 80% revenue from our toll booths.” 

Current toll rates are: 

  • saloon cars – 50Gp, while
  • pick-ups and light buses – GH¢1, from the 8Gp they used to pay.
  • heavy buses and light goods truck (two axles) – GH¢1.50; 
  • medium goods truck (three axles) – GH¢2; 
  • heavy goods truck (four axles) – GH¢2
  • heavy goods truck (five or more axles) – GH¢2.50

Though the budget statement did not indicate any revised figures, transport operators, commercial and private drivers should expect an increment in road tolls.

Gaming policy

Regulated by the Ghana Gaming Commission the gaming industry is fast expanding and becoming a profitable business venture. The industry comprises of

  • Casinos
  • Sports Betting
  • Route Operation (Slot Machines)
  • Importation and installation of Gaming Equipment
  • Promotional Gaming (Games of Chance)
  • Betting on Horse Racing
  • Scratch Cards
  • Bingo

According to the budget statement, the government loses GH¢300million annually in revenue due to leakages in the sector. The government, therefore, plans to develop policies that will ensure efficient and effective mobilization of revenue from the sector.

All in all, these tax initiatives proposed by the government should aid the government in mobilizing additional revenue to aid in the swift recovery of the economy given the devastating impact of the coronavirus. On the other hand, individuals and businesses will in the coming months’ experience an increase in expenditure as a result of the new tax proposals. 

facebookShare on Facebook
TwitterTweet
ShareTweetShare

Related Posts

Government expecting $1.2bn in IMF disbursement for 2023 –Dr Adam

Government expecting $1.2bn in IMF disbursement for 2023 –Dr Adam

May 15, 2023
Fitch Solutions forecasts 43% depreciation of cedi to dollar in 2022

Cedi to end 2023 at ¢12.40 to a dollar – Fitch Solutions

May 9, 2023
Covid-19 and Russia/Ukraine war are not only contributors to Ghana’s economic woes – Fitch Solutions

Covid-19 and Russia/Ukraine war are not only contributors to Ghana’s economic woes – Fitch Solutions

April 20, 2023
Ghana’s economic outlook to remain negative until fiscal economy improves – Fitch

Sovereign default at record high; Ghana, Zambia among countries significantly affected – Fitch

March 30, 2023
Ghana records $752.8m trade surplus in first 2 months of 2023

Ghana records $752.8m trade surplus in first 2 months of 2023

March 27, 2023
Next Post
Public debt, fiscal deficit hit record highs

Latest BoG data point to economic stress

Government Invests $1.4 Billion In Water Projects

Discussion about this post

Archives

<
May 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
▼
>
MonTueWedThuFriSatSun
1234567
891011121314
15161718192021
22232425262728
293031    
       
     12
3456789
10111213141516
17181920212223
24252627282930
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
  12345
6789101112
13141516171819
20212223242526
2728     
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
   1234
567891011
12131415161718
19202122232425
262728293031 
       
 123456
78910111213
14151617181920
21222324252627
282930    
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
   1234
567891011
12131415161718
19202122232425
2627282930  
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
  12345
6789101112
13141516171819
20212223242526
27282930   
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
    123
45678910
11121314151617
18192021222324
252627282930 
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
 123456
78910111213
14151617181920
21222324252627
28      
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
1234567
891011121314
15161718192021
22232425262728
2930     
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
  12345
6789101112
13141516171819
20212223242526
27282930   
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
   1234
567891011
12131415161718
19202122232425
262728293031 
       
 123456
78910111213
14151617181920
21222324252627
282930    
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
   1234
567891011
12131415161718
19202122232425
2627282930  
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
1234567
891011121314
15161718192021
22232425262728
       
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
      1
2345678
9101112131415
16171819202122
23242526272829
30      
   1234
567891011
12131415161718
19202122232425
262728293031 
       
 123456
78910111213
14151617181920
21222324252627
282930    
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
1234567
891011121314
15161718192021
22232425262728
2930     
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
  12345
6789101112
13141516171819
20212223242526
27282930   
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
     12
3456789
10111213141516
17181920212223
242526272829 
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
    123
45678910
11121314151617
18192021222324
252627282930 
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
      1
2345678
9101112131415
16171819202122
23242526272829
30      
   1234
567891011
12131415161718
19202122232425
262728293031 
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
     12
3456789
10111213141516
17181920212223
24252627282930
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
1234567
891011121314
15161718192021
22232425262728
2930     
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
    123
45678910
11121314151617
18192021222324
25262728   
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
   1234
567891011
12131415161718
19202122232425
2627282930  
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
     12
3456789
10111213141516
17181920212223
24252627282930
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
    123
45678910
11121314151617
18192021222324
252627282930 
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
      1
2345678
9101112131415
16171819202122
23242526272829
30      
   1234
567891011
12131415161718
19202122232425
262728293031 
       

RECOMMENDED

Government expecting $1.2bn in IMF disbursement for 2023 –Dr Adam

Government expecting $1.2bn in IMF disbursement for 2023 –Dr Adam

May 15, 2023
Rationalising Decisions: The Psychology of Making Sense of the Nonsensical

Rationalising Decisions: The Psychology of Making Sense of the Nonsensical

May 15, 2023

MOST VIEWED

Plugin Install : Popular Post Widget need JNews - View Counter to be installed
  • Energy
  • Health
  • Auto
  • International
  • Subscription Form
  • Staff Webmail
  • About Us
  • Contact Us
Call us: +233 24 432 0902 | info@goldstreetbusiness.com

© Copyright © 2020 goldstreetbusiness.com. All Rights Reserved.

No Result
View All Result
  • Homepages
    • Homepage Layout 1
    • Homepage Layout 2
  • World
  • Business
  • Technology
  • Health

© Copyright © 2020 goldstreetbusiness.com. All Rights Reserved.

Login to your account below

Forgotten Password?

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.