Government has increased its Value Added Tax (VAT) rate by 2.5 percentage points.
This information was announced by Finance Minister, Ken Ofori-Atta, when he presented the 2022 budget statement in Parliament on Thursday.
Prior to increase, VAT – standard rate was at the rate of 12.5%, National Health Insurance Levy (NHIL), 2.50%, Ghana Education Trust Fund (GFL), 2.50%, 1% COVID-19 Levy, 1%, (VAT) on NHIL and GFL and 1% COVID-19 Levy was 0.75%.
From 19.25%, VAT will now hit 21.75%.
“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 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,” he said.
According to him, the increase in VAT is expected to yield GHc2.70 billion which will be used to augment funding for the road infrastructure development.
“This will be complemented by a major compliance programme to ensure that we derive the maximum yields from existing revenue handles,” he added.
Source: The Independent Ghana