Tax cuts begin
A new tax regime came into effect from March 31, 2017, following the amendment of some tax laws. Changes to the tax system follows the repeal of the Customs and Excise (Petroleum Taxes and Petroleum Related Levies) Act of 2005, Act 685, and amendment of the Special Petroleum Tax Act, 2014 (Act 879).
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Following the amendment, the tax rate on petroleum products has been reduced from 17.5 per cent to 15 per cent.
The new rate is currently being charged on petrol, diesel, liquefied petroleum gas (LPG), natural petroleum gas (NPG) and kerosene imported into the country.
Additionally, the removal of the one per cent special import levy on some items has been effected.
The development is expected to bring relief to importers of some machinery and equipment under the harmonised system and customs tariff schedule of 2015, as their imports will now attract a zero per cent levy.
Exemption
Some imported products have also been exempted from the special import duty. These include imported educational, cultural and scientific materials, fishing gear, machinery, plant, apparatus and spare parts for agricultural purposes.
Imported raw materials for local printing of textbooks and exercise books through tenders administered by the Ministry of Education have also been exempted from taxes.
Also, agro-chemicals, drugs and feed ingredients imported solely for agricultural purposes and ingredients for the production of poultry feed certified by the Ministry of Food and Agriculture will not attract taxes.
Again, raw materials for the local manufacture of HIV/AIDS medicines under the supervision of the Ministry of Health will be cleared at the ports without tax liabilities.
To ensure the smooth implementation of the new tax regime, the Customs Division of the Ghana Revenue Authority (GRA) has issued a tariff interpretation order.
The Daily Graphic has sighted a copy of the order signed by the Commissioner of the Customs Division, Mr Kuudamnuru John Vianney.
The order, issued to all ports and stations under the Customs Division on March 28, 2017, instructed all sector commanders to make copies of the order available to all stakeholders.
2017 Budget
When contacted, the Assistant Commissioner of the GRA in charge of Communications and Public Affairs, Mr Robert Nana Mensah, confirmed the tariff interpretation order and said it was issued to explain and amplify the changes in tariffs arising out of the 2017 Budget and Economic Policy of the government.
He confirmed that the Kotoka International Airport (KIA), the ports in Takoradi and Tema and all ports of entry across the country, such as Aflao, had started implementing the order.
According to Mr Mensah, the new excise duty rate would be computed on cost, insurance and freight (CIF) and shall be paid at the port of entry.
Background
The government announced the abolition of some taxes in the 2017 budget statement presented to Parliament last month.
The Finance Minister, Mr Ken Ofori-Atta, who laid the budget before Parliament, said the decision to abolish nine tax lines and reduce three others, among other tax initiatives, was to bring relief to Ghanaians, promote tax compliance and provide incentives for the private sector to grow and create more jobs.