Finance Minister Ken Ofori-Atta on Thursday (24 November) proposed in the 2023 budget presentation an increment in the Value Added Tax (VAT) by 2.5%.
He said the increment has become necessary because of the “demand for roads” in most parts of the country.
“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,” Ofori-Atta said in Parliament.
He added: “In that regard we are proposing the implementation of new revenue measures. The major one is an increase in the VAT rate by 2.5 percentage points.”
The standard VAT rate is 12.5%, except for supplies of a wholesaler or retailer of goods, which are taxed at a total flat rate of 3%.
He said the proposal to increase the rate forms part of the seven point agenda to revitalise the economy, adding that the government will undertake major structural reforms in the public sector.
“This increase is expected to yield GHC2.70 billion which will be used to augment funding for our 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 said.
Source: Daily Mail GH
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