On Saturday, February 10 2024, the National Communications Officer of the National Democratic Congress (NDC), Sammy Gyamfi said on TV3’s The Key Point that over 40 new taxes have been slapped on Ghanaians by the government.
He made this statement while presenting his views on the recent public lecture delivered by the flagbearer of the New Patriotic Party (NPP), Dr Mahamudu Bawumia, about his vision for the country.
Claim: He [Bawumia] has slapped over 40 taxes on Ghanaians as chairman of the Economic Management Team.
In this explainer, Fact-Check Ghana presents a breakdown of all the taxes introduced and reviewed by the Akufo-Addo/Bawumia government.
New taxes introduced by the Akufo-Addo/Bawumia government
- Covid levy – 2021
In 2021, the government introduced a 1% COVID-19 Health Levy on the supply of goods or services made in the country other than exempt goods or services as well as on the import of goods or services other than exempt imports to support COVID-19 expenditures.
- Electronic Levy – 2022
In May 2022, the government introduced a tax of 1.5% on electronic transactions but later reduced it to 1% in March 2023.
- 5% Financial Sector Clean-up Levy – 2021
The government imposed a 5% levy on the pre-tax profit of banks, known as the Financial Sector Clean-Up levy. The government said it was a temporary measure to generate revenue to help settle outstanding commitments related to cleaning up the financial sector in 2017. The levy is expected to be reviewed this year, 2024.
- Energy Sector Cleanup levy – 2021
The government introduced a 20 pesewas energy sector recovery levy on every litre of diesel or petrol.
- Sanitation and Pollution Levy – 2021
The government introduced the Sanitation and Pollution levy on Petrol and diesel at a charge of GH¢ 0.10 per litre.
- Growth and Sustainability Levy – 2023
Ghana’s Parliament on Friday 31st March 2023, passed three (3) tax bills which are expected to rack up about GH¢4 billion annually (Income Tax Amendment Bill, The Excise Duty Amendment Bill, and the Growth and Sustainability Amendment Bill).
The Growth and Sustainability Levy is a new tax which came to replace The National Fiscal Stabilization Levy Act 2013 (Act 862) which has already been repealed. The levy is calculated as a percentage of the business’s Profit Before Tax (PBT) or Gross Production, regardless of any existing concessions or agreements.
- Withholding tax on the realisation of assets and liabilities- 2023
This is a 3% and 10% tax withheld by residents and non-residents respectively when making payment for considerations regarding assets and liabilities realised.
- Betting Tax 2023
This is a 10% tax on all lottery and sports betting winnings
- VAT Flat Rate Scheme (VFRS) introduced for retailers and wholesalers under VAT, NHIL, GETFUND – 2017
In 2017, a 3% VAT Flat Rate Scheme was introduced for retailers and wholesalers.
- Emissions Levy Act, 2023 (Act 1112)
The Emissions Levy Act, 2023 (Act 1112) has been enacted to impose charges on carbon dioxide equivalent emissions originating from specific sectors and emissions produced by internal combustion engine vehicles (See here for the rates payable).
Taxes reviewed upwards by the Akufo-Addo/Bawumia government
- An increase in BOST Margin from 3% to 9% in 2022.
- About 11% increase in Special Petroleum Tax (from 41 pesewas to 46 pesewas) on every litre of diesel and petrol.
- The 12 pesewa Price Stabilisation and Recovery Levy on petrol and 10 pesewas of diesel and LPG were increased to 16 pesewas on petrol and 14 pesewas on diesel and LPG
- Increase in Fuel Marking Margin (from 3 pesewas to 5 pesewas) per litre of petrol and diesel.
- Increase in Primary Distribution margin from 8 pesewas to 10 pesewas.
- 36% increase in Unified Petroleum Price Fund (UPPF) from 22 pesewas to 30 pesewas.
- Increase in Road Fund Levy from 46 pesewas to 48 pesewas on every litre of diesel and petrol.
- Energy debt recovery levy was increased from 42 pesewas to 49 pesewas on petrol and imposed on petrol and diesel.
- Excise Duty (Amendment) (No.2) Act, 2023, Act 1108 was amended. The Act was expanded to include certain items and commodities such as processed fruit juice, cigars, mineral water, spirits, wines, and sparkling wine.
- Stamp Duty (Amendment) Act, 2023, Act 1109 was amended and gazetted on 29th December, 2023 to increase the rate of stamp duties. The new rates range from as low as Ghs18 to as high as Ghs896.30 for duties assessed on specific basis whilst as low as 0.25% to 0.5% on duties assessed on ad valorem basis. The revised rates of income tax for individuals introduce an additional income tax bracket.
- Income Tax (Amendment) (No. 2) Act, 2021, Act 1071. The Act was amended to increase the rates of income tax applicable to individuals (See here for chargeable incomes and rates).
- Income Tax Amendment Bill – 2022. The Income Tax (Amendment) Act, of 2023 (Act 1094) introduced a 10% withholding tax on lottery and winnings.
Taxes reviewed downward by the Akufo-Addo/Bawumia government
– National Electrification Scheme Levy has been reduced from 5 per cent to 3 per cent.
– Public Lighting Levy has been reduced from 5 per cent to 2 per cent.
– The 17.5 VAT/NHIL rate has been replaced with a flat rate of 3 per cent for traders; and
– Tax credits and other incentives for businesses that hire young graduates have been instituted.
–The withholding tax rate for the sale of unprocessed gold by small-scale miners has been reduced from 3% to 1% under the Income Tax (Amendment) (No. 2) Act, 2021, Act 1071.
While some politicians argue that an upward adjustment in current taxes increases the tax burden on Ghanaians, tax experts contend that categorising an increased existing tax as a new tax is incorrect.
In conclusion, even with the addition of the increased taxes to the tax list, the new taxes introduced by the Akufo-Addo/Bawumia government do not exceed 40. This makes Sammy Gyamfi’s claim that the NPP has introduced 40 new taxes false.
