Ghana’s government has abolished several Covid-era taxes labeled as “nuisance levies” to alleviate economic distress for citizens. Finance Minister Cassiel Ato Forson emphasized the importance of this change in improving disposable incomes and supporting business growth. The government plans to improve tax collection and establish regulations for the gold sector amidst ongoing economic challenges.
On Tuesday, Ghana’s new government announced the cancellation of several Covid-era taxes established to secure financing from the International Monetary Fund (IMF). Finance Minister Cassiel Ato Forson referred to five of these taxes as “nuisance levies,” which included a one-percent levy on mobile money transfers and a value-added tax on motor vehicle insurance. The government aims to alleviate hardship experienced by citizens due to economic distress.
The decision to scrap these taxes comes amid significant concerns regarding how the government will address the expected revenue shortfall stemming from their removal. With the economy characterized by “severe distress,” primarily due to debt mismanagement and financing shortages, officials are working to implement alternative measures to enhance tax collection for the country.
Minister Forson emphasized that the tax removal would ease the burden on households and improve their disposable incomes. He suggested that the eliminated levies would also serve as a catalyst for business growth, reinforcing the government’s commitment to proactive economic management.
Along with removing the previous levies, the government also plans to amend the Revenue Administration Act to facilitate improved tax revenue collection, which it anticipates will contribute an additional 0.3 percent to Gross Domestic Product (GDP). Moreover, there are intentions to improve road toll collection to support infrastructure projects through the “Big Push” initiative.
Economist Daniel Amateye Anim-Prempeh commended the government’s decision, suggesting it would empower citizens financially and support business recovery. However, he emphasized that the effectiveness of these tax cuts will depend heavily on the government’s capability to enhance revenue collection without exacerbating the fiscal deficit. Additionally, the new government has announced the establishment of the Ghana Gold Board to better regulate and manage the gold sector, aiming to stabilize the local currency and bolster foreign exchange reserves amidst challenges such as illegal mining.
In summary, the Ghanaian government’s decision to abolish several nuisance taxes is a strategic move aimed at alleviating economic hardship for citizens and fostering business growth. While there are concerns regarding potential revenue shortfalls, the government plans to implement new measures to enhance tax collection. The establishment of the Ghana Gold Board further reflects a commitment to stabilize the economy and manage resources effectively, underlining the need for responsible fiscal management as the country navigates through its current economic challenges.
Original Source: www.sanfordherald.com
