President Nana Addo Dankwa Akufo-Addo has signed into law the Income Tax Amendment Bill, the Excise Duty Amendment Bill, and the Growth and Sustainability Amendment Bill, taxes recently approved by Parliament.
This was revealed by the Information Minister, Kojo Oppong Nkrumah, on the JoyNews show The Probe. He claims to have handed off the document to the Clerk of Parliament so that the administrative procedures can continue.
After days of debate, MPs showed up in large numbers on Friday, March 31, 2023, to cast their votes. The bills were introduced in Parliament as part of the government’s efforts to mobilise domestic revenue of around 4 billion Ghana cedis each year.
The minority in Parliament fought hard against the proposed taxes, but the majority managed to gather enough votes on voting day to pass them. The government has previously indicated that the tax laws are necessary in order to help the government finish processes for the about $3 billion IMF deal and improve the revenue condition of the country.
It was passed with a voice vote. The Finance Ministry said that if these bills aren’t passed, the country could face serious problems that could send shockwaves through the economy.
To do this, the government plans to put a 20% tax on e-cigarettes, fruit drinks, and other items. After a headcount, the excise duty was passed with 137 for the majority and 136 for the minority. In addition, the Income Tax Amendment Bill of 2022 was approved on the third reading.
What are the new taxes?
The bills are the Excise Duty Amendment Bill, the Growth and Sustainability Levy Bill, and the Income Tax Amendment Bill.
The Income Tax (Amendment) Bill, 2022, aims to make changes to the Income Tax Act, 2015 (Act 896) in order to revise individual income tax rates and introduce a new income tax classification.
The Excise Duty (Amendment) Bill, which will impose a 20% tax on cigarettes, e-smoking devices, as well as sweetened beverages, spirits, and wines, is expected to generate approximately GH400 million annually, while the Income Tax (Amendment) Bill will generate approximately GH1.2 billion annually.
The Growth and Sustainability (Amendment) Bill, which will replace the National Fiscal Stabilisation Levy that is presently imposed on companies operating in particular industries, is also expected to generate approximately GH2.2 billion.
