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Ghana to introduce tax increases for certain industries
The Ghanaian government aims to raise USD183 million from tax increases in three draft bills. Taxand South Africa takes a look at which industries will be affected most by these levies.
The National Stabilisation Levy Bill proposes a 5% tax on the profits of mining companies, telecom firms, and financial institutions, including banks. The levy would be applied for an 18-month period, during which the government plans to raise roughly USD43.4 million.
The government intends to raise another USD24.6 million from a 20% levy on mobile handsets in the draft Customs and Excise Bill, while the Special Import Bill will raise tariffs on specific imports.
The hikes are in line with Finance Minister Seth Terkper's plans to lower the budget deficit from 12% of GDP in 2012 to 9% in 2013 through increased tax collection and oil production, despite calls from local economists for a widening of the tax base.
Those affected have already complained of multiple and high taxation. Telecom companies argued that the introduction of a separate 6% tax on interconnection charges in the draft Communications Service Tax Amendment Bill amounted to double taxation. In April, mining companies complained that, following 2012 tax increases, the tax burden for miners had reached 47%, over 13% higher than in neighbouring gold producer Burkina Faso.
Given increased recurrent expenditure and higher public-sector wages and subsidies in 2013, the proposed tax hikes are likely to be approved, albeit with some moderate reductions in rates that affect the general population, such as the mobile handset levy.