On 12th March 2021, The Caretaker Finance Minister, Osei Kyei-Mensah-Bonsu presented the 2021 Budget Statement and Economic Policy. These are the tax measures proposed in the budget for 2021/2022.
1. COVID-19 Levy
The introduction of a COVID-19 health levy. This levy will take the form of a 1% increase in the National Health Insurance Levy and a 1% increase in the VAT Flat Rate.
2. Additional COVID-19 Support Measures
Provision of a rebate of 30% on the income tax due for companies in hotels and restaurants, education, arts and entertainment, travel and tours for the second, third and fourth quarters of 2021.
Suspension of the quarterly income tax instalment payments for the second, third and fourth quarters of 2021. This is only applicable for small businesses using the tax stamp system.
Vehicle Income Tax
Suspension of quarterly instalment payments of the vehicle income tax for the second, third and fourth quarters of 2021. This measure is only applicable for trotros and taxis to reduce the cost of transportation.
Extension of the waiver of interest as an incentive for early payment of accumulated tax arrears
A waiver of penalty and interest on accumulated tax arrears up to December 2020 to reduce cash flow challenges for companies and individuals who arrange terms with GRA to pay up the principal by September 2021. Beneficiaries of these reliefs will have to be registered with the Ghana Revenue Authority and must have fulfilled their first-quarter tax obligations.
3. Sanitation and Pollution Levy (SPL)
The introduction of a SPL of 10 pesewas on the price per litre of petrol/diesel under the Energy Sector Levies Act.
4. Energy Sector Recovery Levy
An Energy Sector Recovery Levy of 20 pesewas per litre on petrol/diesel under the ESLA was proposed.
Note: Following the implementation of the two proposed levies – sanitation and pollution and energy sector recovery – this will result in a 5.7% increase in petroleum prices at the pump.
5. Tax Audits and Recovery of Outstanding Debts
The Minister also stated that tax administration-wise, the Ghana Revenue Authority (GRA) will intensify tax audits. It will also institute measures to recover all outstanding debts and to enforce collection of taxes.