On January 31, 2024, a member of the ruling New Patriotic Party’s (NPP) communication team, Awal Mohammed, said on TV3’s New Day Show that the government has moved Ghana from taxation to production. He added that the government has not introduced up to ten new taxes since it came into office.
Claim: “We have abolished 17, we have not introduced up to 10 new taxes. When we say we were moving away from taxation we were not saying that we will not tax. We said we will move away from taxation to production and we started the One District One Factory which is production and we abolished 17 nuisance taxes.”
Verdict: False
Explanation: During the 2016 election, the NPP promised to reduce the tax burden on Ghanaians by shifting the country from taxation to production. Then opposition leader, who is now President, Nana Akufo-Addo, and his running mate, Dr Mahamudu Bawumia, criticised the Mahama administration for piling up taxes that crippled industries and made Ghanaians poorer. They promised to scrap the “nuisance taxes.”
Two years into office, the NPP started scrapping and reviewing some taxes imposed. The New Patriotic Party under the leadership of President Nana Akufo Addo has been in the news on several occasions in recent times for several tax-related reasons including amending and introducing new taxes.
According to the government, these new taxes and adjustments will help it generate enough revenue to help Ghana’s economy. Three new taxes were introduced in the 2023 budget
In this report, Fact-Check Ghana presents taxes introduced by the NPP 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.
2. 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.
3. 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.
4. Energy Sector Clean up levy – 2021
The government introduced a 20 pesewas energy sector recovery levy on every litre of diesel or petrol.
5. 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.
6. Growth and Sustainability Levy – 2023
Ghana’s Parliament on Friday 31st March 2023, passed three (3) new tax bills which are expected to rack up about GH¢4 billion annually. The Growth and Sustainability Levy, one of the new taxes, 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.
7. The Excise Duty Amendment Act-2023
In March 2023, Parliament amended and expanded this Act to include certain items and commodities that were previously not included. Due to this expansion, the prices of processed fruit juice, cigars, mineral water, spirits, wines, and sparkling wine may increase. In essence, the government introduced this tax on some goods.
8. African Union Import Levy – 2017
In 2017, the government passed the African Union Import Levy of 0.2% on eligible imports of goods originating from a non-member territory into a Member State territory to be consumed in the member states.
9. Income Tax Amendment Bill – 2022
The Income Tax (Amendment) Act, of 2023 (Act 1094) introduced a 10% withholding tax on lottery and winnings. This includes betting, gaming and other games of chance. Companies that declare losses for five years will be subject to a minimum charge of 5%. Additionally, individuals earning more than ¢500 will be taxed, with higher earners paying more to the state.
10. VFRS introduced for retailers and wholesalers under VAT, NHIL, GETF – 2017
In 2017, a 3% VAT Flat Rate Scheme was introduced for retailers and wholesalers.
11. 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.
The above-listed taxes show that the claim that the NPP has introduced less than 10 new taxes is false.
Has the NPP abolished 17 taxes as claimed?
Communicators of the ruling NPP say the government has abolished 17 taxes. However, that claim is misleading. What the government did with this was to scrap the same tax of 17.5% VAT/NHIL off some specific services and goods. That does not mean the government abolished 4 different taxes.
- The NPP abolished 17.5 per cent VAT/NHIL on;
- Financial services
- Selected imported medicines, that are not produced locally;
- Domestic airline tickets
- 5 per cent VAT/NHIL on Real Estate sales
2. The NPP government also abolished income taxes on the following;
- 1% income tax on mutual fund and unit trust schemes
- 25% income tax on real estate investment trusts (REIT)
- 5% income tax on the commission of lotto agents and tax on lotto winnings
Other taxes the government has scrapped include the following.
- 1 % Special Import Levy
- Abolished excise duty on petroleum;
- Duty on the importation of spare parts
- Levies imposed on kayayei by local authorities;
- Tax on the gains from the realisation of securities listed on the Ghana Stock Exchange or publicly held securities approved by the Securities and Exchange Commission (SEC)
In conclusion, the claim that the NPP government has scrapped 17 “nuisance taxes” and has introduced not more than 10 taxes is false.
