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#Budget2023: VAT increased to 15 percent

 


The government has increased the Value Added Tax (VAT) from 12.5 to 15 per cent as part of measures to reset the economy to the path of growth.

The 2.5 per cent increment is to directly support the roads sector and the government's digitalisation agenda.

The Finance Minister, Ken Ofori-Atta, announced in Parliament on Thursday during the presentation of the 2023 Budget Statement and Economic Policy of the Government.

Among a raft of measures to be rolled out in line with resetting the economy is the review of the E-Levy Act and reduce the headline rate from 1.5 per cent to one percent of the transaction value as well as the removal of the daily threshold.

Resource measures

63. Mr. Speaker, Government has consistently indicated its intention to improve the revenue collection effort by leveraging technology to enhance tax administration, identify and register taxable persons and improve tax compliance.

64. Mr. Speaker, Government has received several proposals for review of the Electronic Transfer Levy and is working closely with all stakeholders to evaluate the impact of the Levy in order to decide on the next line of action which will include revision of the various exclusions. As a first step, however, the headline rate will be reduced to one percent (1%) of the transaction value alongside the removal of the daily threshold.

65. To this end, the income tax regime will undergo reforms to among others, review the upper limits for vehicle benefits and introduce an additional income tax bracket of 35%.

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