Source: newsthemegh.com
The government is planning to impose a tax on resident Ghanaians’ foreign revenues in an effort to make up for the revenue deficit caused by the recent removal of the Value-Added Tax (VAT) on electricity. This move is anticipated to bring in about GH¢1.8 billion.
Strong popular opposition forced the government to back down from its earlier decision to impose a value-added tax (VAT) on power, as required by Ghana’s agreement with the International Monetary Fund (IMF). This left a sizable revenue shortfall.
“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.” the Ghana Revenue Authority’s (GRA) Julie Essiam verified the new tax measure’s reach.
Ms. Essiam went into more detail about the GRA’s approach, saying that the authority has put in place strong structural safeguards to guarantee that the new tax brings in the desired amount of money.
The GRA has also given taxpayers the option to voluntarily disclose information. An interest waiver on foreign income accounts will be granted to those who voluntarily reveal them within the following three months.
Ms. Essiam also stated. “The implementation has begun because the team is mobilising themselves and drafting the letters to be sent to individual account holders. So by the 2nd of May, those letters might have gone out,”
Dr. Mohammed Amin Adam, the minister of finance, reaffirmed the need for the new fiscal measures and emphasized the value of public support for the government’s initiatives to boost the economy.
The government’s most recent attempt to close the budget deficit and preserve fiscal stability is the implementation of the foreign income tax, yet it is unclear how the Ghanaian people will react to this new taxing approach.