To address the revenue gap caused by discontinuing the VAT on electricity, the Government aims to implement a tax on the foreign incomes of resident Ghanaians.
Earlier this year, the government introduced a value-added tax on electricity but had to retract it due to public opposition, resulting in a revenue shortfall of approximately GHc 1.8 billion.
The government had initially intended to introduce the VAT on electricity as a revenue measure within the IMF deal.
However, due to public resistance, the initiative was scrapped, resulting in a revenue deficit.
The government is optimistic that enforcing compliance with the tax on foreign incomes will bridge the revenue gap.
Ghana’s agreement with the IMF includes specific expenditure rationalization and revenue measures to achieve fiscal consolidation.
To offset the shortfall, the government plans to enforce the tax on foreign incomes for Ghanaians residing in the country for 183 days or longer.
“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.”
The GRA boss also encouraged taxpayers to take advantage of the window created to get the interest on their accounts waived.
“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”.
Meanwhile, Finance Minister Dr. Mohammed Amin Adam urges Ghanaians to be patient as the government implements new measures to revive the economy.