The Government of Ghana is currently looking for ways to cover the revenue gap created as a result of abandoning VAT on electricity, with a tax on income from abroad Ghanaians.
Details
At the beginning of the year the government introduced value added tax on electricity, which was met with massive public backlash. The government then chose to abandon the initiative, which in turn created a revenue gap about GHC 1.8 billion.
The VAT on electricity was part of the revenue measures in the International Monetary Fund (IMF) deal.
Digging deeper
In a press conference, the Minister of Finance, Dr. Mohammed Amin Adamand the Ghana Revenue Authority has said it will ensure compliance with a foreign income tax closes the revenue gap.
Ghanaians residing in the country for 183 days or more and earn income from abroad should comply with the tax.
What they say
Ms. Julie EssiamCommissioner of the Ghana Revenue Authority:The alternative is a compliance measure for Ghanaian resident foreign income. Not Ghanaians abroad. We want to make that clear. This is not a measure. It was in policy, but its implementation was suboptimal. We are pleased to announce that we have taken strong and structural measures to ensure that this generates revenues of GHS 1.8 billion and above.”
“Its implementation has begun because the team is mobilizing and drafting the letters to be sent to individual account holders. So by May 2, those letters may have been erased. If people come forward within three months and say, this is the amount in this account, the interest in the account will be waived and that is the voluntary disclosure aspect of this measure“.
Because this matters
Ghana’s agreement with the IMF entails certain expenditure and revenue streamlining measures to ensure fiscal consolidation of the economy.
Source: Citinews
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