Following the abandonment of the value-added tax (VAT) on electricity earlier this year, the Ghanaian government is set to introduce a tax on the foreign incomes of resident citizens to address the resulting revenue gap.
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Initially, the introduction of the VAT on electricity was part of Ghana’s agreement with the International Monetary Fund (IMF).
However, due to public opposition, the government decided to discontinue it, leaving a substantial revenue shortfall of around GH¢1.8 billion.
To mitigate this deficit, the government is focusing on ensuring compliance with a tax on the foreign incomes of Ghanaian residents who have lived in the country for 183 days or more.
Julie Essiam, the boss of the Ghana Revenue Authority (GRA), clarified that this measure targets resident Ghanaians specifically, not Ghanaians living abroad. She emphasized that while the policy has been in place, its implementation has not been fully optimized.
“We are happy to announce that we have put strong and structural measures in place to ensure that this yields the revenue of GH¢1.8 billion and beyond,” Essiam stated.
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Credit: MyJoyonline.com
The GRA has also introduced a voluntary disclosure opportunity, allowing taxpayers to declare their foreign income accounts within three months. Taxpayers who comply will benefit from the waiver of interest on their accounts.
Essiam further explained, “Its implementation has begun because the team is mobilizing themselves and drafting the letters to be sent to individual account holders. So by the 2nd of May, those letters might have gone out.”
Finance Minister Dr. Mohammed Amin Adam acknowledged the necessity of implementing new measures to revitalize the economy and urged Ghanaians to support the government in this endeavor.
As the government endeavors to address the revenue gap and bolster economic stability, the implementation of this tax on foreign incomes of residents represents a significant step forward in Ghana’s fiscal policies.
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