The Ghana National Chamber of Commerce and Industry (GNCCI) has described the government’s decision to increase Value Added Tax (VAT) by 2.5% in the 2023 Budget as insensitive.
“For me, it was insensitive for the VAT to have been increased in these times,” the chief executive of GNCCI, Mark Badu Aboagye, told sit-in host of The Asaase Breakfast Show Benjamin Offei-Addo on Monday (28 November).
“In our submission to the Finance Minister before the 2023 budget was read, we made it clear that an increase in any tax will be suicidal in respect to the current state of affairs,” he added.
Increment
Value added tax (VAT) is expected to increase by 2.5 percentage points, the Minister for Finance, Ken Ofori-Atta, has announced last week.
The standard rate of VAT is 12.5%, except for supplies for a wholesaler or retailer of goods, which are taxed at a total flat rate of 3%.
Ofori-Atta said the proposal to increase the rate forms part of the government’s seven-point agenda to revitalise Ghana’s economy.
Presenting the 2023 Budget Statement in Parliament on Thursday (24 November 2022), the minister said that the increase in the VAT rate by 2.5 percentage points is “to directly support our roads and digitalisation agenda”.
He also announced that the government will undertake major structural reforms in the public sector.
Ofori-Atta said the government is determined to change Ghana’s fortunes and he admitted that the country has been going through difficulty.
“The government is determined to change the negative narrative and rebuild for a better future,” the minister said.