The government is set to reduce the rate of the electronic transfer levy to 1 percent from 1.5 percent.
This was contained in the budget statement to be presented by the Finance Minister.
The Minister indicated that this review was part of a “seven-point agenda aimed at restoring macro-economic stability and accelerating our economic transformation.”
He added that the move is to “aggressively mobilise domestic revenue.”
“Mr. Speaker, the demand for roads has become the cry of many communities in the country. Unfortunately, with the current economic difficulties and the absence of a dedicated source of funding for road construction, it is difficult to meet these demands. In that regard, we are proposing the implementation of new revenue measures. The major one is an increase in the VAT rate by 2.5 percentage points.”
“This will be complemented by a major compliance programme to ensure that we derive the maximum yields from existing revenue handles,” he added.
The Minister also announced that the budget will be hinged on7-point agenda at restoring macro-economic stability and accelerating Ghana’s economic transformation as articulated in the Post-COVID-19 Programme for Economic Growth (PC-PEG).
They include an agenda to aggressively mobilize domestic revenue, streamline and rationalise expenditures, boost local productive capacity, promote and diversify exports, protect the poor and vulnerable, expand digital and climate-responsive physical infrastructure and implement structural and public sector reforms.
According to Mr. Ofori-Atta there are three critical imperatives which are successfully negotiating a strong International Monetary Fund programme, coordinating an equitable debt operation programme; and attracting significant green investments.
To aggressively mobilize domestic revenue, the Finance Minister stated that the VAT rate has been raised by 2.5% to directly support the roads and digitalization agenda, the fast-tracking of the implementation of the Unified Property Rate Platform programme in 2023, and the review of the Electronic Transaction Levy Act, specifically lowering the headline rate from 1.5% to 1% of transaction value and removing the daily threshold.
Mr. Ofori-Atta stated that the government will, among other things, cut imports of public sector institutions that rely on imports for inputs or consumption by 50% and will work with the Ghana Audit Service and the Internal Audit Agency to ensure compliance.