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While Zim Goes Taxes Mad Ghana Abolished “Nuisance Taxes” And Prospered
8 October 2018
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By Paul Nyathi|While the Zimbabwean new Minister of Finance Mthuli Ncube went to the mountains introducing several belt tightening government revenue collection methods, Africa’s biggest growing economy Ghana took the opposite in its last budget move.

The Ghanain Minister for Finance, Ken Ofori-Atta, announced in his last budget speech that the country was abolishing some taxes he termed “nuisance taxes” to promote growth in the private sector and the country has been reaping the harvests.

According to him, although some of the taxes were introduced by the erstwhile National Democratic Congress (NDC) government to raise revenue, they had proven to be unprofitable means of raising money and had rather become a burden to the private sector, stifling their development.

The list of taxes abolished, the Minister said, included the 1% Special Import Levy, Kayayei market tolls , 17.5% VAT/NHIL on financial services ,17.5% VAT/NHIL on selected imported medicines produced locally, 17.5% VAT/NHIL on domestic airline tickets , duty on imported spare parts, 5% VAT/NHIL on Real estate sales and the exercise duty on petroleum.

The Minister also adjusted corporate income tax from 25% to 20% in 2018 while the 17.5% VAT/NHIL was completely abolished and was replaced with 3% flat rate for traders, tax credits and other incentives for businesses that hire young graduates from tertiary institutions were also reduced to create local employment.

Opposed to Zimbagwe, the Ghanaian government also reduce special petroleum tax rate from 17.5% to 15% as well as provided tax incentives for young entrepreneurs.

“A number of tax measures have been introduced in recent years in an attempt to deal with revenue shortfalls. Some have proven to be nuisance taxes. They have no revenue yielding potential, and at the same time impose a significant burden on the private sector and on the average Ghanaian citizen. As part of our commitment to re-energize the private sector, the government has decided, as pledged, to review these taxes to provide relief for business,” he said.