Ghana is expected to rake in a total revenue of GHS100.5 billion in 2022, Finance Minister Ken Ofori-Atta has announced.
“Mr Speaker, total revenue and grants for 2022 is projected to rise above GHS100 billion for the first time – GHS100.5 billion, equivalent to 20 per cent of GDP up from a projected outturn of GHS70.3 billion, equivalent to 16 per cent of GDP for 2021”, Mr Ofori-Atta told parliament on Wednesday, 17 November 2021 when he presented the 2022 budget.
He said: “Domestic revenue is estimated at GHS99.5 billion and representing an annual growth of 44 per cent over the projected outturn of 2021”.
“The increase in domestic revenue by 44 per cent”, he noted, “is as a result of the impact of a major progressive tax policy complemented by improvement in tax compliance and reforms in revenue administration that we have outlined in the budget”.
Mr Ofori-Atta also observed that despite the COVID-19 pandemic, not a single public sector worker was laid off.
Meanwhile, the government has indicated that it will streamline the country’s tax regime to prevent large companies from abusing tax exemptions.
With Ghana losing about five per cent of its Gross Domestic Product (GDP) annually due to excesses in taxes of companies operating in the free zones enclave, the government says it is putting in place measures to handle wasteful tax exemptions.
In the same budget, Mr Ofori-Atta said the government, through the Exemptions Bill which will be laid in the house in 2022, will trim down wasteful tax exemptions to ensure the country gains 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 the government to address the fundamental issues affecting the economy to ensure that our nation continues to maintain its position,” he said.
More Reliefs for Textile Industry
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.
Limiting of VAT flat rate to retailers
Mr Ofori-Atta also indicated that the 3 per cent 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.
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 GHS500,000.
All other retailers and wholesalers will charge the standard rate.