The Budget Statement and Economic Policy of the Government of Ghana for the 2019 Financial Year was under the theme “A Stronger Economy for Jobs and Prosperity”. This budget, which focused on six priority areas - agriculture, industry, infrastructure, entrepreneurial support, revenue mobilisation and protecting the public purse, and social partnership - indicated total estimated domestic revenue and grants of GH¢59 billion and sought to authorise estimated expenditure of GH¢73 billion.
The initiatives proposed by the budget were aimed at creating a conducive atmosphere for businesses to operate in order to boost the Ghanaian economy. There are six strategic pillars on which the budget is underpinned:
Facilitating infrastructural expansion with a focus on land, sea and air transportation systems, water, health infrastructure, housing, communication facilities, and educational infrastructure, among others.
Modernising agriculture aimed at boosting production and reducing dependence on imports for food. A significant programme is the ‘Rearing for food and jobs’ with the objective of increasing the production of selected livestock. There are proposals to invest in increased irrigation, adding value to cocoa, as well as establishing the Ghana Commodity Exchange aimed at linking agricultural producers to traders.
Industrialisation plans targeted at value-added to agricultural
produce and natural resources, developing agro-processing through the 1D1F. The plans also include developing bauxite reserves to build the aluminium industry and developing a petrochemical industry.
Entrepreneurship aimed at boosting the private sector
and creating an enabling environment for businesses to thrive. This includes easing the process of doing business in Ghana, attracting foreign investment and strengthening Ghana’s trade links.
Strengthening domestic revenue
mobilisation by enforcing the Tax Identification Number (TIN) system, revamping operations of the Ghana Revenue Authority and ensuring that revenues are collected
Strengthening social intervention by continuing with the free Senior High School policy, and including informal workers in the social security scheme.
Several tax initiatives were proposed, aimed at protecting the public purse and broadening the tax net.
Review of the Personal Income Tax Band –The highest personal income tax rate band is proposed to be reduced from 35% to 30%. The threshold of monthly chargeable income affected by the highest tax band will potentially increase from GH¢10,000 to GH¢20,000 respectively.
Relief from Tax for Minimum Wage Earners – The tax-free personal income tax band is proposed to be increased to rope in income earned by minimum wage earners, which currently exceeds the tax-free band.
Withholding Tax on Small Scale Mining: In order to simplify the collection of withholding tax for both small-scale mining operators and tax authorities, the point of collection of the tax is proposed to be shifted to the point of export.
Reform of Revenue Institutions: The Ghana Revenue Authority will be equipped to enhance revenue mobilisation.
Prosecuting tax defaulters: Punitive actions will be brought against habitual defaulting taxpayers in order to retrieve unpaid taxes.
Facilitating implementation of automated systems: Accelerating the implementation of automated systems such as the Fiscal Electronic Device (FED) to enhance the effective collection of Value Added Tax (VAT) and the Excise Tax Stamp Policy in order to minimize human interference in tax administration.
Broadening tax net - Leveraging on enforcing the Tax Identification Number (TIN) by making it mandatory for state and private entities to administer this measure. Enforcement measures include ensuring that TINs are prerequisites to accessing social services like free healthcare, free SHS policy, and others like vehicle licensing and registration, passport services, banking services and mobile money services.
Review of tax exemptions and reliefs – Embarking on reforms to ensure that tax benefits and reliefs are beneficial to the country, both immediately and in the future.
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