Value Added Tax (VAT) is set to be increased by 2.5% in 2023.
The Minister of Finance, Ken Ofori-Atta has said.
The Minister was in Parliament on Thursday, November 24, to present the 2023 Budget Statement and Economic Policy of the government.
During his presentation, the Minister disclosed that the budget is anchored on a seven-point agenda aimed at restoring macroeconomic stability and accelerating economic transformation.
Among the seven-point agenda, Ken Ofori-Atta said the government wants to aggressively mobilise domestic revenue.
To this end, he said VAT will be increased by 2.5%.
“To aggressively mobilise domestic revenue we will among others increase VAT rate by 2.5% to directly support our roads and digitization agenda,” Ken Ofori-Atta told Parliament today.
Currently, the standard VAT rate is 12.5%, except for supplies of a wholesaler or retailer of goods, which are taxed at a total flat rate of 3%.
Below is 10 highlights of the 2023 budget:
1. E-Levy reduced from 1.5% to 1%
2. VAT increased by 2.5%
3. Freeze on the hiring of civil and public servants
4. No new government agencies shall be established in 2023
5. Reduction of expenditure on appointments including salary freezes together with suspension of certain allowances like housing, utilities, and clothing. etc
6. Limited budgetary allocation for the purchase of vehicles
7. A ban on the use of V8s/V6s or its equivalent except for cross country travel
8. All non-critical projects must be suspended for the 2023 financial year
9. There shall be no hampers in 2022
10. A freeze on new tax waivers for foreign companies and review of tax exemptions for free zone, mining, oil and gas companies.