2.5% VAT increase to fund infrastructure development
The 2.5 per cent increase in the value added tax (VAT) is to help support the development of the country's infrastructure projects.
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As a result, proceeds from the increment are to be paid into the newly announced Ghana Infrastructure Fund (GIF), which will, among other things, be used to meet the country's growing infrastructure needs.
Finance Minister, Mr Seth Terkper, announced this while presenting the 2014 Budget and Economic policy Statement of the government on Tuesday.
The funds from the VAT increase are one of the sources of funding for the GIF, Mr Terkper said.
The increment on the VAT from 12.5 per cent to 15 per cent last week sparked debate in Parliament with the minority arguing that the process was rushed.
The reasons for the increment and how the excess funds would be applied were also not immediately stated.
Mr Terkper, however, said in his budget speech to Parliament that the 2.5 per cent was one of the sources of funds for the GIF, which he said will help reduce the country's yawning infrastructure deficit.
The GIF will be headed by a board and will report to the Ministry of Finance, Mr Terkper added.
