Government has moved to sanitise the country’s tax regime by focusing on existing loopholes available to large corporations.
Presenting the 2022 budget in Parliament on Wednesday, November 17, 2021, the Finance Minister, Ken Ofori-Atta said a well-thought-out Tax Exemptions Bill will be presented to legislators next year.
The bill, the Minister said today, will trim down wasteful tax exemptions to ensure the country gain significant returns from companies enjoying tax exemptions.
"We wish to reiterate that we are in challenging times, which require radical measures, so let us embrace these new policies to enable Government to address the fundamental issues affecting the economy, to ensure that, our Nation continues to maintain its position," he said.
Available statistics show that Ghana loses about 5% of Gross Domestic Product (GDP) annually to excesses in taxes of companies operating in the free zone.
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Mr Ofori-Atta is confident that the bill will streamline the award of tax exemptions to businesses in the country.
The Minister also announced a two-year extension of the Value Added Tax (VAT) relief on African prints for textile manufacturers in the country.
According to him, the extension is to enable them to resuscitate their operations and provide affordable textiles to the market.
Mr. Ofori-Atta also indicated that the 3% VAT flat rate on the supply of goods by wholesalers and retailers which was introduced in 2017 will now be limited to only retailers explaining that all other supply of goods and services will attract the standard rate.
This the Minister explained that the object of the flat rate is to provide a simplified system for small scale enterprises noting that to ensure that this objective is achieved, the rate will be applied to retailers with annual turnover not exceeding GH¢500,000. All other retailers and wholesalers will charge the standard rate.