News:
July 5, 2013
Parliament has approved the re-introduction of the National Fiscal Stabilisation Levy (NFSL) for a period of 18 months to raise funds for fiscal stabilisation of the economy.
The NFSL imposes five per cent toll on the profit-before-tax of some specified companies and institutions.
Clause Five of the NFSL Bill mandates the Commissioner-General of the Ghana Revenue Authority (GRA) to prepare a provisional assessment in respect of the companies and institutions liable to pay the tax.
Clauses six and seven deal with the time for the payment of the levy and the powers of the GRA to collect the levy.
Clause Eight mandates the Commissioner-General of the GRA to pay all money collected under the Act into the Consolidated Fund.
The government, in an attempt to ensure fiscal stability, introduced the National Fiscal Stabilisation Act, 2009 (Act 785) in the second half of 2009, to raise funds for national development.
The Act was repealed in late 2011, following the stability of the economy.
However, the implementation of the Single Spine Salary Scheme (SSSS), among other things, have led to budget overruns in many sectors of the economy.
Expenditure on the SSSS also threatens to crowd out investment in critical sectors of the economy.
Therefore, according to the government, there is the need to re-impose the levy to help generate revenues to support the shortfalls in the budget.
The estimated revenue expected from the imposition of the levy is Gh¢ 88,000,000.
Presenting the report of the Finance Committee before the House, the Vice Chairman of the Committee, Mr Gabriel Kodwo Essilfie (NDC, Shama), said the committee, in its deliberations considered the NFSL Bill to be of an urgent nature and must be taken through all the stages in one day in accordance with Article 106 (13) of the Constitution and Order 119 Standing Orders of the House.
He said the committee, in its deliberations with the minister of Finance, learnt that the rate was pegged at five per cent because the government did not want to overburden businesses with high rate of taxes.
He said the Minister told the committee that the economy was recovering from the effects of the water and energy crisis and any high tax rate was likely to adversely affect businesses and eventually slow down the recovery of the economy.
“The five per cent proposed levy seems reasonable under the circumstance,” he
said.
Mr Essilfie said the committee held the view that although the proposed tax was generally not high, the government could generate more revenue if areas, other than the “traditional sources” were explored.
“The committee, therefore, calls on the ministry to broaden the tax net to rope in other sectors of the economy,” he said.