New taxes kick in on May 1

The Covid-19 health recovery levy and additional taxes on retail petroleum products announced in the 2021 budget will come into force from May 1, the Ghana Revenue Authority (GRA) has said.

According to the GRA, the 1 percent Covid-19 health recovery levy will be applied to both domestic goods and services as well as imports, but excluding exempt products. The levy will also be applied to the supply of goods that are subject to the VAT Flat Rate, it added.

The additional taxes on petroleum consist of the Energy Sector Recovery Levy and the Sanitation and Pollution Levy. The former will be levied at 20 pesewas per litre of petrol and diesel, and 18 pesewas per kg of Liquefied Petroleum Gas (LPG), while the latter will be levied at 10 pesewas per litre of petrol and diesel.

The taxes, which the government introduced to help narrow the fiscal deficit that reached a record 11.7 percent of GDP in 2020, will likely increase price pressures in the coming months, backing analysts’ forecasts of a more cautious monetary policy from the Bank of Ghana through the rest of the year to help keep a lid on inflation—which stood at 10.3 percent in March.

The GRA also announced that banks will begin paying the 5 percent financial sector levy on their pre-tax profits from the end of June. The government has justified the levy, which is forecast to raise GH¢219.1m this year and GH¢416.3m in 2022, as necessary to cushion the fiscal impact of the financial sector clean-up exercise, for which the public treasury has expended more than GH¢21bn since 2018.

Meanwhile, tax reliefs for the self-employed as well as businesses in the accommodation, food, education, travel and tours, and arts and entertainment sectors will be accessible from the second to the last quarter of the year, the GRA said.

“To benefit from these concessions, the person must be registered with the Ghana Revenue Authority, [have] made an instalment payment for the first quarter of 2021, and continue to discharge any other obligation specified by an enactment administered by the Commissioner-General,” the authority added.

Source: Business 24, https://business24.com.gh/2021/04/27/new-taxes-kick-in-on-may-1/

Share on facebook
Share on twitter
Share on linkedin
Share on print

Subscribe to our newsletter

Be the first to hear about our offers and anouncement.

More Articles