That, it said, was in line with its initiative to ensure both businesses and consumers benefit from the numerous economic incentives announced in the budget.

“Currently, discussions with the various associations such as the Pharmaceutical Society of Ghana, spare parts dealers at Abossey Okai, Ghana Union of Traders Association (GUTA), players in the aviation industry, among others, are ongoing to ensure that prices of goods and services are reduced in accordance with the incentives introduced in the budget,” a Director of the Revenue Policy Unit of the Ministry of Finance, Mr Anthony Dzadra, told the GRAPHIC BUSINESS last Thursday in Accra.

Mr Dzadra indicated that the Pharmaceutical Society of Ghana, together with the Ministry of Health and other stakeholders, for instance, were expected to conduct an impact assessment of how these incentives would positively affect the National Health Insurance Scheme (NHIS).

“Therefore, the Pharmaceutical Society of Ghana, together with the Ministry of Health, are expected to come out with figures on how this reduction would affect the cost of drugs and also trickle down to consumers,” he said.

Economic incentives

Among other economic incentives announced in the budget statement and economic policy of the government for the 2017 financial year was the reduction in taxes to ease the high cost of doing business in the country.

Taxes such as the 17.5 per cent Value Added Tax (VAT) on financial services, domestic air tickets and imported medicines have been scrapped, while others such as the one per cent special import levy has been removed.

Also, the excise duty on petroleum, duty on imported spare parts, levies imposed on kayayei, levies imposed on religious institutions and the five per cent VAT on real estate have been abolished under the new government.

Meanwhile, the 17.5 per cent special petroleum tax rate has been reduced to 15 per cent, while the five per cent national electrification scheme levy has also been reduced to three per cent and the five per cent public lighting levy has been reduced to two per cent.

About GH¢800 million tax revenue is estimated to be lost per year as a result of the removal and reduction in what it described as 'nuisance taxes' in the 2017 Budget Statement.

To reverse the trend, the government, through the various revenue collection agencies, has begun implementing several compliance measures such as point of sale devices to seal the leakages in the system.

Divergent reactions                            

But divergent reactions have greeted the tax cuts introduced in the budget. The President of the Association of Ghana Industries (AGI) had welcomed the scraping and reduction of some taxes on goods and services.

It stated that although the news was pleasing, it would engage the government over some of the taxes for which it did not announce reductions.

For his part, the Chief Executive Officer of Dalex Finance, Mr Ken Thompson, said the taxes abolished were woefully inadequate to positively impact on private business operations.