These new taxes reflect the government's commitment to achieving economic sustainability and providing essential public services.
The taxes have stirred discussions and debates among various stakeholders, it's essential to recognize the government's efforts to create a sustainable and resilient economy.
The successful implementation of these tax measures depends on effective communication, transparency, and a collaborative approach between the government and citizens.
In this article, Pulse.com.gh will explore some of the key taxes introduced by the government in Ghana.
New taxes introduced by the NPP government during their first term 2017-2024
- E-Levy
One of the notable additions to Ghana's tax system is the electronic transaction levy, commonly known as the E-Levy. Introduced to capture revenue from the growing digital economy, this levy imposes a small percentage on electronic transactions, including mobile money transfers, e-commerce transactions, and other digital financial services.
The E-Levy aims to broaden the tax base and ensure that the digital sector contributes its fair share to national development.
- Emissions levy tax
The Emissions Levy is in line with the government's efforts aimed at tackling greenhouse gas emissions to promote the use of eco-friendly technology and green energy.
The levy amount varies based on the type of vehicle and its engine capacity.
- 10% tax on betting and lottery winnings
The GRA outlined that this withholding tax will be automatically deducted at the point of payout for all betting, games, and lottery wins.
In cases where a game is canceled and the player's initial stake is refunded, or if the pay-out amount is equal to or less than the staked amount, the withholding tax will not be applicable.
To facilitate easy monitoring by the revenue authority, lottery operators are required to update their software to display the details of the amount staked, the winnings, and the tax withheld during payout.
- 3% VAT flat rate
The tax payable at a flat rate of 3% is equivalent in value to the effective tax payable by traders on the current invoice-credit scheme at a rate of 12.5% which employs the input-output mechanism.
It is designed for all VAT-registered retailers of taxable goods with an annual turnover of more than GH¢200,000 but not exceeding GH¢500,000. These registered taxpayers shall charge VAT/NHIL and COVID-19 HRL at a marginal rate of 4% on the value of their taxable sales.
- 5% increase in VAT by making the GETFUND levy and NHIL straight taxes.
- 5% National Fiscal Stabilization levy
- 2% Special import levy (extended beyond the expiry date of 2017)
- Luxury vehicle tax (GH¢1000 to GH¢2,500 depending on the engine capacity of the vehicle)
Ghana has passed the Luxury Vehicle Levy to impose an annual levy on vehicles with high engine capacities.
The Driver and Vehicle Licensing Authority (DVLA) is authorized by the Law to collect the levy on behalf of the government.
The levy shall be paid on the registration of vehicles and subsequently on or before the annual renewal of the roadworthy certificate of such vehicles, with engine capacities listed above.
- 50% increase in Communication Service Tax (CST)
The Communications Service Tax (CST) is one levied on charges for the use of communications services that are provided by electronic communications service providers. CST is imposed under Section 1 of the Communications Service Tax Act 2008, (Act 754) and CST(Amendment) Act, 2013 (Act 864).
It is paid by consumers to the communications service providers, who in turn pay all CST collected to the Domestic Tax Revenue Division of the Ghana Revenue Authority on a monthly basis.
The GRA is required under the law, to pay the CST collected into the Consolidated Fund.
- 1% COVID-19 health recovery levy on the 3% VAT flat rate, making it 4% now.
- 1% COVID-19 health recovery levy on the 2.5% National Health insurance levy, making it 3.5%
The COVID-19 Health Recovery Levy is a stand-alone levy applied to the gross value of taxable supplies of goods and services provided under the Standard Rate and VAT Flat Rate Schemes.
- 5% financial sector clean-up recovery levy.
- 20 pesewas Energy Sector Recovery Levy on every liter of diesel and petrol
- 10 pesewas Sanitation levy (Borla) tax on every liter of diesel and petrol
- 18 pesewas energy sector recovery levy on every kilogram of LPG
- 30% increase in Energy Sector levies (ESLA)
- About 11% increase in Special Petroleum Tax (from 41 pesewas to 46 pesewas) on every liter of diesel and petrol.
- 200% increase in BOST margin from 3% to 9%
- 67% increase in Fuel Marking Margin (from 3 pesewas to 5 pesewas) per liter of petrol and diesel
- 40% increase in Price Stabilization and Recovery Levy on fuel products (from 10 pesewas & 12 pesewas on petrol and diesel respectively, to 14 pesewas and 16 pesewas on diesel and petrol respectively)
- 25% increase in Primary Distribution margin from 8 pesewas to 10 pesewas
- 36% increase in Unified Petroleum Price Fund (UPPF) from 36 pesewas to 47 pesewas
According to the National Petroleum Authority (NPA), the increase is needed to ensure that, freight rates reflect current economic conditions in the country.
The UPPF is used to support the transportation of petroleum products around the country to ensure that prices of the product are the same in every part of the country irrespective of the location.
- Excise Duty Amendment Bill 2022, Growth and Sustainability Levy Bill 2022, Income Tax Amendment Bill 2022
Parliament enacted several laws affecting the taxation of individuals and businesses, effective April 3, 2023.
These law changes seek to increase the duty on certain excisable products, revise the income tax rates applicable to individuals and how the motor vehicle benefit is quantified, and introduce withholding tax on the realization of assets and liabilities.
In addition to consolidating laws subject to administration by the Ghana Revenue Authority, the new laws also unify the unrelieved loss regime, revise the treatment of foreign exchange losses, and introduce a growth and stability levy applicable to entities.
- Increase in Road Fund Levy from 46 pesewas to 48 pesewas
The road fund has been the major source of financing routine, periodic maintenance, and rehabilitation of public roads in the country.