The Ghana Government is currently looking for ways to plug the revenue gap created as a result of the abandonment of its VAT on electricity, with a tax on the foreign incomes of resident Ghanaians.
Details
At the beginning of the year, the government introduced a value-added tax on electricity, which was met with a massive public backlash. The government then chose to abandon the initiative, which in turn, created a revenue gap of about GHC 1.8 billion.
The VAT on electricity was part of the revenue measures in its International Monetary Fund (IMF) deal.
Digging Deeper
In a press conference, the Finance Minister, Dr. Mohammed Amin Adam, and Ms. Julie Essiam, the Ghana Revenue Authority (GRA) Commissioner, stated that tax on foreign incomes will help close the revenue gap.
The GRA will enforce the law for Ghanaians who live abroad but spend a cumulative 183 days in the country
What They’re Saying
Ms. Julie Essiam, Ghana Revenue Authority Commissioner: “The alternative is a compliance measure on foreign incomes of resident Ghanaians. Not Ghanaians abroad. We want to make that clear. This is not a measure. It has been in the policy but its implementation has not been optimal. We are happy to announce that we have put strong and structural measures in place to ensure that this yields the revenue of GHS 1.8 billion and beyond.”
“Its implementation has begun because the team is mobilizing themselves and drafting the letters to be sent to individual account holders. So by the 2nd of May, those letters might have gone out. If individuals come forward within three months and say that, this is the amount in this account, the interest on the account will be waived and that is the voluntary disclosure aspect of this measure”.
Why This Matters
Ghana’s deal with the IMF entails certain expenditure rationalization and revenue measures to ensure fiscal consolidation of the economy.
Source: Citinews
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