Gov't proposes tax increases in 2013 budget

Government has announced tax increases as well as new taxes to raise money to fund its ambitious plans for the country in its 2013 fiscal policy statement.

Finance Minister Seth Terkper told Parliament the country’s tax regime had remained largely unchanged for a very long even though situations had changed.

He said the increases would not only help the government to expand its social intervention programmes but ensure that the taxes aligned perfectly with existing trends in revenue mobilisation.

Mr. Terkper said that the adjustments in personal income taxes were necessary to redistribute income whilst widening the tax band was designed to take account of inflation.

On vehicle income tax, the minister said "in the last revision of vehicle income tax, existing quarterly rates were increased for vehicles of all categories except ‘trotro’ and taxis. It is only fair that we adjust these rates that have not changed since 2005."

"For example an owner of a 33-seater commercial vehicle is paying only GH¢15 per quarter (GH¢ 5 per month) as compared to rates paid by public servants and other workers in the formal sector. It is to be noted that the incidence of this tax is not on the drivers of these vehicles but on the owners," he added.

Explaining the proposal for "Environmental Taxes", Mr. Terkper said 100. Mr. Speaker, the growing concern about climate change in many advanced and developing countries have brought environmental issues to the forefront of the policy agenda in most of the advanced and developing countries of which Ghana should not be left out."

In view of this "Environmental taxes have been introduced on plastics at a rate of 15 percent with exemptions for pharmaceuticals and agricultural sectors. Also, plastic for water sachets were exempted. Mr. Speaker, it is time as a nation for us to find a solution to the environmental hazards of water sachets. In this respect, the Ministry of Finance (MoF) and the GRA will later in the year submit proposals for the review of the tax regime."