Finance Minister, Ken Ofori-Atta, has noted that although government believes in lower taxes for the industry, it is currently unable to remove the majority of the taxes as demanded by the public.
“It is difficult to implement all the structural reforms and tax reliefs needed to immediately lower and/or eliminate certain tax handles,” the Finance Minister said while presenting the 2024 budget statement.
He noted that this is because, in the short term, fiscal sustainability requires that the country improve its tax ratios significantly; otherwise, its long-term competitiveness will be eroded despite believing in lower taxes for industry.
In the interim, government says there are some reliefs that have been prioritised for implementation.
Among these reliefs is a zero-rate VAT (value-added tax) on locally produced sanitary pads.
Also, the government is looking at granting import duty waivers for raw materials for the local manufacture of sanitary pads.
This implies that the cost of local sanitary products will decline when implemented. However, imported sanitary pads will continue to see the current taxation measure.
Sanitary products are currently enlisted in Chapter 96 of the Harmonized System, and that attracts a 32.5% tax on imported sanitary pads, which comprises a 20% import duty and a 12.5% Value Added Tax.
Prior to the 2024 budget presentation, many called on the government to remove the taxes on sanitary pads which has stalled the education of several girls in rural communities. Aggrieved individuals lamented the high cost of sanitary pads due to the high taxes.
The other relief measures are as follows:
- Extend zero rate of VAT on locally manufactured african prints for two (2) more years.
- Waive import duties on import of electric vehicles for public transportation for a period of 8 years.
- Waive import duties on semi-knocked down and completely knocked down Electric vehicles imported by registered EV assembly companies in Ghana for a period of 8 years;
- Extend zero rate of VAT on locally assembled vehicles for 2 more years;
- Grant exemptions on the importation of agricultural machinery equipment and inputs and medical consumables, raw materials for the pharmaceutical industry;
- A VAT flat rate of 5 percent to replace the 15 percent standard VAT rate on all commercial properties will be introduced to simplify administration.