PARLIAMENT PASSES BILL TO SCRAP TAXES ON SPARE PARTS
Parliament has passed the Customs Amendment Bill which will ensure the removal of import duty taxes on spare parts. The bill was passed despite stiff opposition from the Minority side, who argued that the passage will not benefit spare parts dealers. Speaking to Citi News, the Deputy Minority Leader, James Avedzi wondered whether the passage will yield the required results, since in his view, no mechanism has been put in place to ensure a corresponding reduction in prices of spare parts to reflect the removal of import duty taxes.
“The targeted beneficiary who are actually the consumers will eventually not benefit…The Minority is not against it. It is only saying that there must be a mechanism to ensure that the effect is felt by the consumer. The mechanism to ensure that if you go to the market, the importer pays less duty or no duty on the parts at the ports. The mechanism must be put in place to ensure that the price of spare parts reflect that reduction…,” Mr. Avedzi argued.
The Finance Minister, Ken Ofori Atta in March, announced the abolition of taxes as promised by the Akuffo Addo government.
Mr. Ofori Atta had explained that although some of those taxes were introduced by the erstwhile National Democratic Congress (NDC) government to raise revenue, they had proven to be unprofitable means of raising money, and had rather become a burden to the private sector, stifling their development.
Parliament subsequently approved four amendment Bills to scrap taxes as proposed in the 2017 budget.
The Bills were the Income Tax (Amendment) Bill, Special Petroleum Tax (Amendment) Bill, Special Import (Amendment) Bill and Customs and Excise (Petroleum Taxes and the Petroleum Related Levies (Repeal) Bill.
Below is the list of taxes that have been abolished and reviewed by the government
– 1 percent Special Import Levy;
– 17.5 percent VAT/NHIL on financial services;
– 17.5 percent VAT/NHIL on selected imported medicines, that are not produced locally;
– Initiate steps to remove import duties on raw materials and machinery for production within the context of the ECOWAS Common External Tariff (CET) Protocol;
– 17.5 percent VAT/NHIL on domestic airline tickets;
– 5 percent VAT/NHIL on Real Estate sales;
– Excise duty on petroleum; – Special petroleum tax rate from 17.5 percent to 15 percent;
– Duty on the importation of spare parts; – Levies imposed on kayayei by local authorities;
– Taxation, the gains from realisation of securities listed on the Ghana Stock Exchange or publicly held securities approved by the Securities and Exchange Commission (SEC);
– Reduce National Electrification Scheme Levy from 5 percent to 3 percent;
– Reduce Public Lighting Levy from 5 percent to 2 percent;
– Replace the 17.5 VAT/NHIL rate with a flat rate of 3 percent for traders; and
– Implement tax credits and other incentives for businesses that hire young graduates.
Source: Marian Ansah/citifmonline.com/Ghana