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November 30, 2022
2022-1780

Tax highlights of Ghana's 2023 Budget Statement and Economic Policy provided

  • The Minister has presented the 2023 Budget Statement and Economic Policy.
  • This Alert highlights the proposed tax measures.

Executive summary

On 24 November 2022, Ghana's Minister for Finance and Economic Planning, Honorable Ken Ofori-Atta (the Minister), read an abridged version of the 2023 Budget Statement and Economic Policy (the 2023 Budget) in Parliament on the authority of Ghana's President in accordance with Article 179 of the 1992 Constitution of Ghana.

This Alert summarizes the key aspects of the 2023 Budget relating to tax.

Detailed discussion

The 2023 Budget is focused on resetting Ghana's economy and restoring macroeconomic stability. The Minister stated that the Government was seeking to significantly enhance revenues, cut down the cost of running government, expand local production, invest more to protect the poor and vulnerable, continue expanding access to good roads, education, and health care for every Ghanaian. To improve revenue collection, the Minister indicated that the Government will be leveraging technology to enhance tax administration, identify and register taxable persons and improve compliance. Consequently, the Minister outlined the tax measures, highlighted below, to be introduced.

Value Added Tax (VAT)

The Government of Ghana has proposed to increase the VAT rate by 2.5 % to directly support the roads and digitalization agenda.

Property tax

The implementation of the Unified Property Rate Platform program will be fast-tracked in 2023.

Electronic transfer levy (E-Levy)

In respect of the E-Levy, which is charged on all electronic transactions covering mobile money payments, bank transfers, merchant payments and inward remittances, the Government has proposed to review the levy in 2023 and determine the next line of action which will include a revision of the various exclusions to the E-Levy.

In line with this, the Government has proposed to reduce the headline rate charged on the transaction value from 1.5% to 1% and to also remove the daily threshold.

Income tax

The Minister indicated that the income tax regime will undergo reforms in 2023 which will include a review of the upper limits for vehicle benefits and the introduction of an additional income tax bracket of 35%.

Tax waiver

The Minister stated that there will be a freeze on new tax waivers for foreign companies. Also, tax exemptions for free zones, mining and oil and gas companies will be reviewed.

Other measures

The Minister said that: (i) the Government will initiate measures to overhaul the tax structures in the extractive industry; and (ii) enforce compliance with the legal and regulatory framework on foreign exchange.

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For additional information with respect to this Alert, please contact the following:

Ernst & Young Chartered Accountants, Accra

Ernst & Young Société d'Avocats, Pan African Tax – Transfer Pricing Desk, Paris

Ernst & Young LLP (United Kingdom), Pan African Tax Desk, London

Ernst & Young LLP (United States), Pan African Tax Desk, New York

 

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