Government has allocated GH¢220million to support the relief phase for communities affected by the Akosombo Dam spillage, finance minister Ken Ofori has announced.
Speaking during his presentation of the 2024 budget in Accra, he said a visit by officials from the Ministry of Finance, which included the minister himself, in collaboration with the Volta River Authority – operator of the Akosombo Dam, to some victims of the spillage at Mepe in the Volta Region “was truly revealing and sobering. Indeed, we empathise with the families that have been affected and displaced by the spillage”.
And to relieve the pain of victims, government has budgeted an amount of GH¢220million to support victims of the spillage, in addition to victims of floods upstream in the Oti, Savannah and Bono-East Regions.
“For the restoration phase, government through the Ministry of Agriculture will allocate additional resources to support the restoration of livelihoods. In addition, the Ministry of Finance, after the visit, was quickened to respond. We have requested funding from the World Bank under the IDA Crisis Response Window (CRW) to support resettlement of the victims, restoration of livelihoods, and compensation and reconstruction of infrastructure in the affected communities,” he announced.
Local sanitary pads, agric machinery, drugmakers get tax reliefs
Government has announced a zero-rate VAT on locally produced sanitary pads, along with import duty waivers on raw materials for the manufacture of sanitary pads.
Finance Minister Ken Ofori-Atta revealed this before parliament during his presentation of the 2024 Budget and Economic Policy of government on November 15, 2023.
The announcement comes following calls by civil society organisations (CSOs) and a section of the general public to scrap taxes on sanitary pads.
The groups have argued that the existing taxes made up of 20 percent import tax and 15 percent value added tax (VAT) translate into higher cost of the commodity, making it difficult for the average person to afford.
In response, government granted tax reliefs on only locally manufactured sanitary pads; admitting in his speech that in the current economic condition the country finds itself, it is difficult to implement all the structural reforms and tax reliefs needed to immediately lower and/or eliminate certain tax handles outrightly.
“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.
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.
“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 – to be cemented with the standing committee of the Mutual Prosperity Dialogue.”
In addition to the tax relief on sanitary pads announced, Ofori-Atta also announced the extension of zero VAT rate on locally manufactured African prints for two more years; waiver of import duties on import of electric vehicles for public
transportation for a period of eight years; waiver of import duties on semi-knocked down and completely knocked down electric vehicles imported by registered EV assembly companies in Ghana for a period of eight years; as well as the extension of zero rate of VAT on locally assembled vehicles for two more years.
As a means of boosting the agriculture sector, government has decided to grant tax exemptions on the importation of agricultural machinery/equipment; and for the pharmaceutical industry, granted exemptions on inputs and medical consumables and raw materials for the pharmaceutical industry.
The minister also mentioned that a VAT flat rate of 5 percent will be introduced to replace the 15 percent standard VAT rate on all commercial properties to simplify administration.
Tax compliance and revenue mobilisation
Meanwhile, to address the negative externalities of plastic waste and pollution, Ofori-Atta hinted that government will review and expand Environmental Excise Duty to cover plastic packaging and industrial and vehicle emissions, adding that the Stamp Duty Act, 2005 (Act 689) will be reviewed next year to realign rates with current economic realities.
“The Stamp Duty Act, 2005 (Act 689) has not been reviewed since its enactment in 2005. To realign the rate with current economic realities, government in 2024 will review the rates and fees for stamp duties. The bands subject to ad valorem taxes will be expanded while the specific rates will be reviewed upward.
A simplified tax return will be introduced in order to promote voluntary compliance as part of the modified taxation scheme for individuals in the informal sector. This approach will make it easier for taxpayers to fulfil their tax obligations to the state,” he added.