The government will no longer offer automatic tax exemptions on imported goods. President John Dramani Mahama announced this policy shift on Thursday in Accra. Import duty exemptions will now be assessed on a case-by-case basis.
This change means that companies seeking relief from import duties must present specific reasons. For instance, if medical equipment is important for national health, its exemption request will be considered favourably. This selective approach aims to support critical sectors while ensuring fairer revenue collection.
This development fits into Ghana's ongoing efforts to strengthen its public finances. The country has faced challenges with revenue generation. Broad tax exemptions can lead to significant revenue losses for the government. The International Monetary Fund (IMF) has consistently advised Ghana to broaden its tax base and improve tax compliance. Prior to this announcement, certain industries or organizations might have received automatic exemptions, potentially leading to a loss of GHS billions in potential tax revenue annually.
President Mahama made this announcement during the commissioning of a PET-CT scan machine at the Sweden Ghana Medical Centre (SGMC). He was responding to a request made on behalf of the Ghana National Association of Teachers (GNAT). GNAT had requested exemption for medical equipment. The PET-CT scan itself is a sophisticated tool for diagnosing and treating cancer.
The move to end blanket exemptions signals a more disciplined approach to fiscal management. This could lead to increased government revenue, allowing for more investment in public services. It also encourages businesses to be more transparent about their needs. Decision-makers in the Ministry of Finance and the Ghana Revenue Authority will likely be closely watching the impact of this policy on trade volumes and government income. Businesses relying on imported inputs may need to adjust their financial planning accordingly.
Furthermore, President Mahama touched upon a significant housing initiative for teachers. The government plans to establish a GHS 3 billion housing fund. This fund will support two projects: the Teacher Dabre Housing Project and a Mortgage Housing Project. GNAT, Republic Bank, the State Housing Company Limited (SHC), and Tema Development Company Limited (TDC) are partners in this venture. These houses will be priced in Ghana cedis, and teachers can access mortgages to purchase them. This initiative aims to provide secure and affordable housing for educators across the country, addressing a long-standing need.