Keynotes from the 2024 Budget reading – Update one (1)

The minister of finance Ken Ofori Atta presents the 2024 budget and economic policies in parliament today and below are the keynotes.

A VAT flat rate of 5% to replace the 15% standard VAT rate on all commercial properties will be introduced to simplify administration.

Grant exemptions on the importation of agricultural machinery equipment and inputs and medical consumables.

raw materials for the pharmaceutical industry.

Grant import duty waivers for raw materials for the local manufacture of sanitary pads.

Zero rate VAT on locally produced sanitary pads.

Extend zero rate of VAT on locally assembled vehicles for 2 more years.

Waive import duties on semi-knocked down and completely knocked down Electric vehicles imported by registered EV assembly companies in Ghana for a period of 8 years.

Waive import duties on import of electric vehicles for public transportation for a period of 8 years;
The following reliefs have been prioritised for implementation: Extend zero rate of VAT on locally manufactured african prints for two (2) more years.

However, I assure this August House, that we have heard, we believe in lower taxes for industry, and we are working at this aggressively with the GRA and to be cemented with the standing committee of the Mutual Prosperity Dialogue.

In that regard, it is difficult to implement all the structural reforms and tax reliefs needed to immediately lower and/or eliminate certain tax handles.

It is important to note that in the short-term, fiscal sustainability requires that we improve our tax ratios significantly otherwise, our long-term competitiveness will be eroded. As we all know, our country’s 13 percent tax-to-GDP ratio is far below our peers. Our target is 18-20% and we are on course.

Our approach to tax policy since 2017 was to give significant relief to the private sector until expenditure pressures from 2020 required a more aggressive approach.

To address these challenges, Government is reviewing the overall structures and processes to determine the optimal way forward. In the interim, Districts will resume collection until these challenges are resolved.

Despite these achievements, the initiative has encountered some challenges thus making it difficult for the relevant bodies including the Metropolitan, Municipal and District Assemblies to have access to their share of the property rate collections on time.

Bills are currently available online for properties that have been successfully identified.

Similarly, the identification of registered persons and entities associated with billable properties has
increased by 831 percent, from 186,542 to 15.68 million.

The number of billable properties has seen a substantial increase, with a pre-2023 count of 1.3 million
properties escalating to 12.42 million representing an 856 percent surge in properties identified that can now be properly billed.

The objective was to develop a unified common platform capable of billing, collecting, and reporting
property rates nationwide.