- Government has revealed that it will introduce a new tax known as the high net worth income tax
- The new tax, government will charge 35 percent on incomes that are over GHC 10,000
-Government will also charge more on the importation of luxury cars
Minister of Finance and Economic Planning, Ken Ofori-Atta, has revealed that persons who earn GHc10,000 and above will now be taxed 35% of their monthly incomes.
Mr. Ofori-Atta was in Parliament on Thursday to present the mid-year budget review, and he touched on a number of concerns regarding taxes.
According to him, following the latest review of Personal Income Tax, all income earners will now be required to pay 25% tax.
He further stated that the taxation is slightly different for persons who earn GHc10,000 and above.
Such income earners, he said, should be prepared to pay 35% tax, adding that government needs to take certain measures to ensure the country’s GDP growth improves.
The Finance Minister also touched on the special taxation of luxury cars, saying all cars with an engine capacity of 3.0 litres and above, will attract a tax of between GHc1000 and GHc2000.
He explained that only “commercial vehicles will be exempted”, insisting the “levy will be paid on first registration and subsequently at annual renewal”.
“On the under-performance for the first five months of 2018, we will end the year with an estimated deficit of 4.9% of GDP compared to the programmed target of 4.5%, resulting in a fiscal gap of GHS870 million, unless we immediately implement some fiscal measures; intensive tax compliance measures, New revenue measures, Intensive Conversion of NHIL (2.5%) to a straight levy, Conversion of GETFund VAT rate of 2.5% to a straight levy, Imposition of luxury vehicle tax of GHS1,000 – GHS2,000 on non-commercial vehicles with capacity of 3.0 litres and above, review of PIT to include an additional band of GHS10,000 and above per month at a rate of 35% and downward adjustment discretionary expenditures,” Mr. Ofori-Atta told Parliament.
The Finance Minister also urged that reports regarding the supposed upcoming increase in taxes be completely disregarded.
He stated categorically that there will not be any increase in Value Added Tax (VAT) as widely speculated.
"I’ll like to inform the house Mr Speaker that there will be no increase in VAT", Mr Ofori-Atta stressed.
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