More tax for Ghanaians as VAT goes up to 2.5%

Ghanaians will from 2023 pay more for goods and services, as government has reviewed upwards the Value Added Tax (VAT) by 2.5 percent.

This was announced by the Finance Minister, Ken Ofori-Atta on Thursday when he delivered the 2023 budget statement in Parliament.

The Finance Minister said this review was part of a seven-point agenda to boost the economy.

Mr. Ofori-Atta further indicated that the increase is expected to yield GH¢2.70 billion, which will be used to augment funding for road infrastructure development.

“Mr. Speaker, the demand for roads has become the cry of many communities in the country. Unfortunately, with the current economic difficulties and the absence of a dedicated source of funding for road construction, it is difficult to meet these demands. In that regard, we are proposing the implementation of new revenue measures. The major one is an increase in the VAT rate by 2.5 percentage points.”

“This will be complemented by a major compliance programme to ensure that we derive the maximum yields from existing revenue handles,” he added.

The government is also set to reduce the rate of the controversial electronic transfer levy to 1 percent from 1.5 percent.

As part of the review of the e-levy act, the minister also said the daily threshold would be reviewed.