Stabilisation will be scrapped in 2019 -- Finance Minister

The Finance Minister, Mr Ken Ofori-Atta has assured the business community that the government will scrap the national fiscal stabilisation (NFS) levy in 2019 after extending it beyond the original dateline of December 2017.

He said the tax was extended to help raise money to cushion the shortfalls in revenues.

The minister was responding to concerns from the private sector on the actual end date for the levy, which was reintroduced in 2013 as a stop gap measure to rebalance the economy.

Given that the levy has since become a major part of government revenue in spite of its debilitating effect on the private sector, many businesses have always expressed worry over the commitment to permanently withdraw it. 

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While admitting the lukewarm attitude towards removing the tax, Mr Ofori-Atta said his outfit was committed to ending it in 2019.

He was optimistic that revenue enhancement measures announced in the 2018 budget would yield the necessary results to help make-up for the loopholes that the NFS levy is envisaged to plug. The levy is a five per cent tax on the pre tax profits of businesses.

It was first introduced in 2009 as a temporary measure to help mobilise revenue to stabilise the economy from the fiscal slippages it suffered at the time. Two years later, it was scrapped, only to be reintroduced in 2013 to run for 18 months.

It, however, remained, prompting businesses to push for it to be scrapped. Although a sunset clause in the act that reintroduced allowed for it to be removed in December this year, the 2018 budget announced that it will be extended until December 2019.