GUTA’s hopes for budget
Story By: Olive Gibbon
The Ghana Union of Traders Association wants to see nuisance taxes cut, a reform of VAT, and an unconditional tax amnesty in the new government’s first budget, set for the 11th March.
In a recent statement, GUTA hoped that the budget would include an unconditional tax amnesty to allow non-compliant businesses to enter the tax base, for revenue mobilization and “breathing space” for businesses to grow.
GUTA hopes that redundant, ‘nuisance’ taxes will be eliminated. They want to see a “reformed” Value Added Tax (VAT) system. VAT is currently a complex tax in Ghana, with sector disparities and many exemptions. GUTA hopes it will be simplified, more affordable, and uniform across sectors. This echoes the World Bank’s Tamoya Christie’s recent comments urging for Ghana to reform VAT through the removal of exemptions, some of which she saw to no longer serve a purpose. This also mirrors the Ministry of Finance’s recent review of the VAT system, which found that numerous VAT exemptions are “likely a major constraint” of revenue performance in Ghana.
Traders also want to see a fixed import duty system for vehicle spare parts which could eventually cover all imported commodities.
GUTA also hopes for less regular fixing of the Bank of Ghana’s dollar rates. They want the BOG to peg the dollar rate quarterly or bi-annually, instead of doing so at the current weekly or biweekly frequency. BOG dollar rates determine import duty payments, and GUTA argued that to frequently alter them destabilizes business planning. The budget for 2025 is set to be released on the 11th March. It will be Mahama and his administration’s first budget, and is therefore a highly anticipated step for the country’s economic reform. A budget outlines a government’s intended spending and projected tax policies. It will crucially expose where the government plans to direct its spending, choosing certain areas and infrastructural sectors to bolster.
