New Levies Introduced Will Benefit The Economy

New Levies Introduced Will Benefit The Economy

Deputy Finance Minister, Kwaku Kwarteng, has said the new levies announced during the Mid Year Budget Review were necessary for the long-term health of the economy.

The government plans to separate the Health Insurance Fund Levy and the GETFund component from the Value Added Tax (VAT).

These two components will now have straight levies of 2.5 percent.

Though the Akufo-Addo administration promised a shift from taxation, Mr. Kwarteng said political expediency would not keep the government from doing the right thing.

“When you are in government, your job is to do what is in the interest of people; what is in the interest of the broad economy,” Mr. Kwarteng stressed on Eyewitness News.

“Immediately a policymaker starts thinking like that, you know they are not managing an economy, they are doing politics.

Finance Minister, Ken Ofori-Atta
During the mid-year budget review, Finance Minister Ken Ofori-Atta said these new levies, among others, are to ensure the government meets its fiscal deficit target of 4.5 percent of GDP.

Despite these moves, Mr. Kwarteng maintained that the Akufo-Addo government still believes that “you cannot run an economy by imposing taxes on your businesses and your citizens.”

Indirect VAT increment?

Ahead of the budget, speculation was rife that the VAT might be increased outright.
But that turned out not to be the case.
But critics have argued that separating NHIL and GETFund levies from the 17.5% flat VAT rate is a VAT increase in disguise.

The Finance Minister under the Mahama administration, Seth Tekper said attempts at consolidating the Health Insurance and GETFund levies were a ruse.

“Ghana’s VAT rate is 17.5 percent, and that includes NHIL (2.5%) and GETFund (2.5 %). Removing them from the VAT base and making them specific rates (instead of ad valorem) and increasing that rate to earn more revenue (quoting Hon Kwarteng) is a ruse.”

 

Source:ModernGhana

 

About The Author

Yetunde Onanuga is the Business and Advert Manager for Maverick Multimedia, publisher of Acada Magazine where she doubles as the Beauty and Lifestyle columnist. She’s also the creative Director of Beautyful Beauty Ventures; a Make-Up/MakeOver and Fashion and Style outfit, having make up for the likes of Iyanya, Tayo Shobola, Olamide, Olaide Bakare, Brain and Denrele Edun amongst others.

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