Tax measures on VAT and petroleum expected to underpin revenue growth in 2015 On the revenue side, provisional figures for January to September 2014 show an increase of 26% y/y in domestic revenues compared to the corresponding period in 2013, though the outturn was 4% lower than budgeted. Lower tax revenue in the period was partly attributed to a slowdown in economic activity and lower import volumes arising from the sharp depreciation of the local currency (cedi). Against this backdrop, for 2014 as a whole, total revenue and grants are expected to be 5.7% below the revised budget (July 2014) estimates. For 2015, total revenue and grants are targeted to increase 31% y/y, largely underpinned by tax changes. In the main, the new revenue measures entail the imposition of a Special Petroleum Tax of 17.5% (as part of a rationalization of the VAT regime and change in petroleum pricing structure), the extension of the National Fiscal Stabilization Levy of 5% and import levy of 1-2% to 2017, the implementation of VAT on fee-based financial services, a 5% VAT rate on real estate and an increase in the withholding tax on Directors remuneration to 20% from 10%.
Posted on: Wed, 19 Nov 2014 21:08:53 +0000
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