18th January 2024 5:20:51 PM
2 mins readGhana Revenue Authority (GRA) has officially designated January 1, 2024, as the commencement date for the implementation of seven tax amendments recently passed by Parliament and signed into law by President Akufo-Addo. The announcement, detailed in a circular disseminated by the GRA and published in various newspapers, underscores the significant changes that will impact the country's tax landscape.
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The GRA has committed to developing administrative guidelines and issuing notices as necessary to facilitate the smooth implementation of these amendments. Notably, the authority has highlighted that payroll deductions for January 2024 must reflect the new rates stipulated in the Income Tax (Amendment).
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The seven Tax Bills, signed into law by President Akufo-Addo on December 29, 2023, encompass a range of measures affecting different aspects of taxation in Ghana. They include amendments to Value Added Tax (VAT), Excise Duty, Stamp Duty, Emissions Levy, Exemptions, Customs, and Income Tax.
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Among these amendments, the VAT Bill aims to broaden the tax net, extend zero rates on locally manufactured products, introduce zero rates on locally-produced sanitary towels, and waive VAT on the import of electric vehicles for public transportation. However, it may also result in a potential increase of over 21% in Motor Insurance Premiums due to the application of Non-Life Insurance Business and products.
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The amended Excise Duty Bill seeks to realign excise duty rates on certain drinks, reduce excise duty on plastics, and broaden the coverage of excise duty on plastics to include imported plastic packaging.The Emission Levy Act imposes levies on carbon dioxide equivalent emissions from specified sectors and internal combustion engine vehicle emissions.
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This levy structure will affect various sectors, including Construction, Manufacturing, Mining, Oil and Gas, Electricity, Heating, and Motor Vehicles, contributing to the Government's revenue target of over GHS5 billion in 2024.While these tax amendments are anticipated to bolster government revenue, concerns have been raised about potential impacts on the cost of living.
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Notably, motor insurance is expected to surge by more than 30%, adding to the economic considerations accompanying these legislative changes. As these tax reforms take effect, stakeholders will closely monitor their implications on various sectors and the broader economic landscape in Ghana.
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