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Business News of Saturday, 4 November 2017

Source: citifmonline.com

Parliament approves tax cut on imported medicines

Parliament has passed the motion for the removal of the VAT on some selected imported pharmaceutical products.

The decision was taken on Friday, November 3, 2017.

The move is also expected to affect all imported medicines not produced in Ghana.

The removal of the 17.5% VAT on such category of medicines completes a promise by Finance Minister, Ken Ofori Atta when he presented the 2017 budget to Parliament in February 2017.

The tax cut is among some twelve major tax reviews carried out in the 2017 budget.

The NPP government has described the taxes imposed by the erstwhile NDC administration as nuisance.

The NPP argued that the taxes had adversely impacted Ghanaian businesses who engage in such activities.

Other taxes that were slashed in the 2017 budget included the 5% VAT on real estate properties, 17.5% VAT on domestic air ticket fares, 17.5% VAT on financial services, among others.

In addition, the Special Petroleum Tax (SPT) was reduced from 17.5% to 15.5%. Some analysts have however suggested to government the need to be cautious with the tax cuts so as not to erode revenue sources.

In their arguments, failure to identify pragmatic measures to rake in revenue to cater for the shortfall will be dire for the economy going forward.