Seth Terkper faults Ofori-Atta on ‘Kayayei tax’
A former finance minister, Mr Seth Terkper, has criticised the proposed abolishment of taxes charged on head porters (Kayayei), suggesting that the pronouncement was misplaced.
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During the maiden presentation of the current administration’s national budget on Thursday, the Finance Minister, Ken Ofori-Atta, lined up a considerable number of taxes to be abolished as a way of encouraging the growth of the private sector.
Mr Ofori-Atta said taxes charged on the head porters was among the counterproductive taxes that needed to be scrapped.
However, commenting on the budget statement, Mr Terkper suggests that the current Minister goofed when he attempted to make it look like the local government-level tax on the head porters was a national one.
“I think the speech writers should have been a bit more careful. There is no national tax on Kayayei. You know that this is a local government tax. There is nothing like a national kayayei tax. You want it [tax] to go you just need to go the local government authorities,” Mr Terkper said.
Tax cuts
The government also intends to reduce the special petroleum tax rate on petrol from 17.5% to 15%.
Other taxes that will be completely abolished include the following: the one per cent special import levy, the 17.5 per cent VAT on financial services, the 17.5 per cent VAT on selected imported medicines not produced locally and the 17.5per cent VAT on domestic airline tickets.
Others are the five per cent VAT on real estate sales, and duty on importation of spare parts.
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Also, the 17.5 per cent VAT imposed on traders has been replaced with a three per cent flat rate, while businesses that employ young graduates from tertiary institutions will get tax credits and other incentives.
Furthermore, there will be tax incentives for young entrepreneurs while the Corporate Income Tax will be progressively reduced from 25 per cent to 20 per cent in 2018.
Additionally, Mr Ofori-Atta said the Akufo-Addo government will initiate steps to remove import duties on raw materials and machinery for production.