PWC Ghana 2023 Budget Digest

PwC 2023 Budget Digest
Restoring and Sustaining Macroeconomic Stability and Resilience

through Inclusive Growth and Value Addition
Content
1 At a Glance 01
2 Commentary 04
3 Sector Reviews 08
Manufacturing 09
Financial Services 11
Public Financial Management 16
Infrastructure 20
Technology/Cyber 24
Legal/Regulatory 26
4 Tax Matters 29
Direct Tax 30
Indirect Tax 35
Tax Administration and Other Revenue Measures 40
5 Appendix
6 Research and Insights from PwC

At a Glance
Macroeconomic Indicators
Medium
Description 2021 Actual 2022 Target As at Sept 2022 2023 Target Term-Target
(2023 - 2026)
in Real
Growth In
GDP (Inc oil) 5.4% 3.7% 4.0%* 2.8% 4.3%
in Real
Growth In
6.9% 4.3% 6.2%* 3.0% 4.0%
GDP (Non - oil)
12.6% 28.5% 37.2% 18.9% 8%+2
11.3% 6.6% 7.4% 7.7% 6.3%
Gross International >= 4.3 >= 3.5 >= 2.9 >=3.3 >= 4.0
Reserves
*As at June 2022

Source: 2023 Budget Statement; Ghana Statistical Service Bulletin (September 2022); 2022 Budget Statement
Real GDP Growth per Sector

Agriculture Industry Services Agriculture Industry Services Agriculture Industry Services Agriculture Industry Services
8.4% -0.8% 9.4% 4.9% 1.8% 5.4% 0.7% 6.0% 2.9% 2.6% 3.9% 1.7%
2021 EoY Q2, 2022 2022 EoY Projected 2023 Forecast
EoY = End of year

Source: 2023 Budget Statement
Exchange Rates
Q3, 2022 Q3, 2022 Q3, 2022

1/9.61 1/9.42 1/10.70
2021 EoY 2021 EoY 2021 EoY
1/6.01 59.90% 1/6.83 37.92% 1/8.13 31.61%
USD/GH¢ EUR/GH¢ GBP/GH¢
Source: Bank of Ghana Monthly Exchange Rate

rate indicators
Indicators
Interest Rates
30.5% 31.6% 31.4%*
22.0% 20.0%
14.5% 12.5% 13.2%
Monetary Policy Rate 91-Day T-Bill Rate 182-Day T-Bill RateC Commercial Bank Lending Rate
*As at October 2022 2021 EoY 2022 Sept
Source: Bank of Ghana Monthly Interest Rates
1 PwC 2023 Budget Digest Report

2023At
Budget At a Glance
a Glance
Revenue
Taxes on Domestic International
International Trade
Goods and Services Taxes (Import Duties) Refunds
Taxes on Income
and Property
GH¢44.90 billion GH¢14.02 billion (GH¢6.36 billion)

GH¢30.13 billion GH¢9.40 billion (GH¢3.86 billion)
GH¢59.81 billion Grants
GH¢39.60 billion
Non-Tax Revenue
GH¢2.40 billion
GH¢1.50 billion
GH¢23.04 billion Others

GH¢15.16 billion
GH¢6.15 billion
GH¢6.15 billion
GH¢143.94 billion
GH¢98.08 billion 2023 Budget 2022 Projected Outturn
Expenditure
Compensation to Employees Capital Expenditure
1 5
GH¢44.99 billion GH¢27.69 billion
Use of Goods and Services Subsidies
2 6
GH¢5.88 billion Total GH¢0.33 billion
Interest Payments GH¢191.00 billion

GH¢136.92 billion
3 7
Grants to other Government Units Other Expenditure
GH¢30.08 billion
GH¢23.99 billion 4 8 GH¢26.74 billion
GH¢8.34 billion
2023 Budget
2022 Projected Outturn

At a Glance
Public Debt
500.00 90%
76.60% 75.90%
450.00 74.40% 80%
400.00 63.01% 70%
195.66
350.00
60%
300.00
50%
250.00 181.78
149.83 40%
200.00
105.48 30%
150.00
271.71
100.00 20%
170.30
141.80
50.00 112.70 10%
0.00 0%
GH¢ billion GH¢ billion GH¢ billion GH¢ billion
2019 2020 2021 2022 Sept
External Debt Domestic Debt with Bailout Debt to GDP Ratio
Government’s 7-point Agenda
Aggressively Streamline and Boost local Promote and Protect the Expand digital Implement
mobilize
mobilise rationalise productive diversify poor and and climate- structural and
domestic expenditures capacity exports vulnerable responsive public sector
revenue physical reforms.
infrastructure
Key Tax Measures

Key Tax Measures
Direct Tax Indirect Tax
Direct Tax Indirect Tax
• Introduction of a 35% marginal income tax rate for • Increase in the standard
• individuals
Introduction of a
and 35% marginal
revision income
of the upper taxfor
limits rate for
vehicle • Value
Increase in the
Added Taxstandard
(“VAT”)
individuals and revision of the upper limits for vehicle Value Added
rate from 12.5% toTax (“VAT”)
15%.
• Introduction of a minimum chargeable income system. • rate from
Review of 12.5%
VAT to 15%.
•• Introduction of a minimum chargeable income system. • registration
Review of VAT threshold.
•• Restriction of foreign exchange loss deduction to actual • registrationinthreshold.
Reduction the
• losses.
Restriction of foreign exchange loss deduction to actual • Electronic
ReductionTransfer
in the Levy
• losses.
Conversion of the National Fiscal Stabilisation Levy (“NFSL”) Electronic rate
(“E-Levy”) Transfer
fromLevy
1.5%
• to Conversion
Growth andof the National Fiscal
Sustainability Levy Stabilisation Levyall
(“GSL”) to cover (“NFSL”) (“E-Levy”)
to rate from 1.5%
1% of transaction
to Growth
entities. and Sustainability Levy (“GSL”) to cover all to 1%and
value of transaction
removal of
• entities. the 1% concessional income tax rate to 5%.
Increase valuethreshold.
daily and removal of
•• Increase the 1% concessional income tax rate to 5%. • daily threshold.
Withdrawal of benchmark
• • discount
Withdrawal of benchmark
policy on
discount policy
imported goods.on
• imported goods.
Introduction of a
General administrative and other revenue measures • self-clearance
Introduction ofsystem
a
General administrative and other revenue measures for
• Freeze on new tax waivers for foreign companies. self-clearance
imports of goods system
at thefor
•• Review
Freeze on newexemptions
of tax tax waiversfor
forfree
foreign companies.
zones and extractive imports of goods at the
ports.
• industries.
Review of tax exemptions for free zones and extractive ports.
• industries.VAT invoicing to cover all VAT taxpayers by 2024.
Electronic
•• Electronic VAT invoicing to cover all VAT taxpayers by 2024.
•

2 Commentary
Vish Ashiagbor
Country Senior Partner
PwC Ghana
[email protected]
www

Commentary
On Thursday, 24 November 2022, the Honourable Minister for Finance, Hon. Ken Ofori Atta, presented the
2023 Budget Statement and Economic Policy of Government (“2023 Budget Statement” or “the Budget’’)
to Parliament.
The 2023 Budget Statement, themed The 2023 Budget Statement announced a seven-
“Restoring and Sustaining Macroeconomic point agenda aimed at restoring macroeconomic
Stability and Resilience through Inclusive stability and accelerating Ghana’s economic
Growth and Value Addition”, is set in the transformation. The seven points are as follows:
context of the Government’s agenda towards
streamlining expenditure and improving 1. Aggressively mobilise domestic revenue;
domestic revenue mobilisation, while continuing 2. Streamline and rationalise expenditures;
to protect the poor and vulnerable. The policy 3. Boost local productive capacity;
measures outlined in the Budget are consistent 4. Promote and diversify exports;
with those announced by H.E. President Akufo 5. Protect the poor and vulnerable;
Addo in his 30 October 2022 address to the 6. Expand digital and climate-responsive
nation on the economy. physical infrastructure; and
7. Implement structural and public sector
In his address to the nation, H.E. President reforms.
Akufo Addo acknowledged that the Ghanaian
economy is in a crisis. Similarly, in his The Budget also makes reference to a Post-
Budget presentation, the Minister for Finance COVID-19 Programme for Economic Growth
acknowledged the challenges Ghanaians and (PC-PEG), in which the seven-point agenda is
businesses operating in Ghana have faced due said to be further articulated, stating that the
to various factors, including the convergence of 3 critical imperatives on which the PC-PEG is
shocks from the war in Ukraine and the lingering hinged are: (1) successfully negotiating a strong
impact of the COVID-19 pandemic. The Minister IMF programme, (2) coordinating an equitable
acknowledged that the planned and steady debt operation programme, and (3) attracting
recovery of the economy from the pandemic significant green investments.
was derailed by downgrades in credit ratings by
international rating agencies, which adversely Given the economic difficulty in which we find
affected investor confidence, strengthening of ourselves as a country and the clear need
the United States Dollar and delays in passing for urgent fiscal consolidation, we are not
the Electronic Transfer Levy (“E-Levy”) Act. surprised that the Government has focused on
aggressive revenue mobilisation and reduction
Ghana has therefore had to deal with an in expenditure as two of the key initiatives that
increase in expenditure (mainly debt servicing), underpin the 2023 Budget and the medium-term
reduction in revenue, limited sources of external plan.
funding – having lost access to the international
capital markets, depreciation of the Cedi against
major trading currencies and undue pressure on We have spoken on previous occasions about
the financial system. Ghana’s low level of revenue mobilisation, as
reflected by a 13% tax to GDP ratio compared to
The general expectation of the business the West African average of about 18%.
community was for the 2023 Budget to lay
out policy priorities, including details of the With reduced access to the international capital
Enhanced Domestic Programme that was markets and faced with significant financial
promised during the mid-year review. The obligations in the form of interest payments,
mid-year review indicated that the Enhanced compensation to Government employees etc.,
Domestic Programme would complement the there really was no other alternative than to focus
Ghana CARES Programme and would form the more intensely and urgently on domestic revenue
basis of discussion and ultimately, agreement mobilisation. The 2023 Budget Statement
with the International Monetary Fund on a therefore proposes the following new tax
medium-term road map to support Ghana’s measures in a bid to increase revenue:
economy.

• Increase in the standard Value Added Tax • Implement action of the Government
(“VAT”) rate from 12.5% to 15%. directives on expenditure measures;
• Introduction of a 35% marginal income tax • Integrate public procurement approval
rate for individuals and revision of the upper processes with GIFMIS to ensure that
limits for vehicle benefits. projects approved are aligned with budget
• Review of tax exemptions for free zones and allocation;
extractive industries. • Review of key Government programmes to
• Freeze on new tax waivers for foreign reflect relevance, promote efficiency, and
companies. ensure value for money; and
• Fast-track of the implementation of the • Review the efficiency of Statutory Funds.
Unified Property Rate Platform programme
in 2023; and These expenditure management initiatives set
• Reduce the E-levy rate from 1.5% to 1% of out in the Budget are welcome and demonstrate
transaction value and removal of daily non- a positive start to addressing the concerns of
taxable threshold. the citizenry in this regard. The key however lies
in the timely and aggressive implementation
These revenue measures will no doubt generate of these expenditure management measures,
further debate on whether the push over the including monitoring and evaluation of the
years to widen the tax impact of these measures on our overall fiscal
net has been effective. consolidation effort.
While the increase in VAT will certainly affect all

consumers, whether they are existing taxpayers Related to this, it would have been helpful if
or not, a school of thought is that once again Government had indicated the extent of cost
the tax measures will disproportionately affect savings we seek to achieve from these measures
existing taxpayers and does not do enough to so that the general public is better informed
draw in those who still sit outside the tax net. and able to independently assess the effort that
Government is also making to reduce the cost
Our view is that at a time of economic crisis of running Government business to the barest
as is currently the case, everyone who is able minimum at a time that taxes are increasing. This
to do so should contribute to the recovery additional level of transparency is particularly
effort. Some of the additional tax measures are important given that the cost of running
therefore a necessity at this time; however, their Government’s big flagship programmes e.g. the
implementation should run alongside a more Free SHS will apparently remain unadjusted, at
aggressive and more consistent effort by the least in the short term.
Ghana Revenue Authority to cast the net wider
to draw in the many other citizens who should,
but are not paying their fair share of taxes, as The 2023 Budget Statement sets out a renewed
we aim to achieve the targeted 20% ratio of tax vision to boost local production for local
revenue to GDP on a consistent basis. consumption and to promote exports. 2022
has been a year in which Ghana has suffered
As would also be expected in a time of significantly from currency depreciation and its
economic crisis, expenditure management is a pass-through effect on inflation, including food
key area of focus for Government in 2023. inflation.
The 2023 Budget Statement signals a number

of initiatives that seek to rationalise Government
expenditure and respond to concerns raised
by the general public about the need to reduce
the cost of running Government business, while
directing as much of our scarce resources as
is possible to support the less privileged in
our society. Government has indicated some
expenditure management initiatives including
the following:

There can be no doubt that any effort to support • Undertaking major structural reforms in the
exports and overall local production, so that public sector by reviewing the operations
our reliance on imports is significantly reduced, of 36 State-owned Enterprises, 8 Special
is welcome and needs to be pursued with Purpose Vehicles, 90 Joint Venture
urgency. The broad policy intent of providing Companies, 38 Regulatory institutions, 68
support to local industry needs to be further Statutory Bodies and 6 Subvented Agencies;
distilled into specific and measurable elements • Enforce compliance with legal and regulatory
so that local businesses can clearly understand framework on foreign exchange;
what support is available and the extent to • Initiation of measures to overhaul the tax
which the Government will partner with them to structures in the extractive industry; and
drive the export and local consumption agendas • Expand the gold purchase programme
further. by Bank of Ghana to support FX Reserve
accumulation and promote local currency
A major area of concern with respect to our stability.
economy is the level of debt we are faced
with. Ghana’s total debt stood at GH₵467.37 Overall, the Budget confirms that Ghana’s
billion i.e.75.9% of GDP as at 30 September economy is in a difficult place. 2022 has been
2022, with about 58.1% of this position being a difficult year and there is no doubt that 2023
financed by external debt. The 13.3% growth in will be a more difficult year for businesses,
external debt from the 48.4% recorded in 2021 households and citizens in general.
has largely been attributed to the depreciation
of the local currency and is estimated to have However we believe that “Restoring and
added approximately GH₵93.9 billion to the Sustaining Macroeconomic Stability and
debt stock. Resilience through Inclusive Growth & Value
Addition” is attainable, subject to rigorous
In his presentation to Parliament, the Minister implementation of the policy measures that have
noted that Ghana is now considered to be at been announced. The policy direction set out
high risk of debt distress. The Minister also in the Budget is clear; we look forward to more
announced that the Government is committed specifics that will guide effective implementation
to bringing our debt to sustainable levels toward achieving the results that we all desire.
over the medium to long term and will be
implementing a debt exchange programme, Much of what Government plans for 2023 and
working with the general public, the investor the medium term hinges on the outcome of
community and development partners. Government’s engagement with the IMF and
other key stakeholders, including Ghana’s
This has created significant uncertainty for creditors. Overall, it is clear that there is much
businesses, particularly financial institutions, as work to be done all round to achieve the stability
well as the general public, as the Budget did not and growth that we desire. This will require all
provide details of the planned debt exchange stakeholders to put their shoulders to the wheel
programme that it announced. As such this and to support the drive to fundamentally change
remains an area of significant uncertainty, which the structure of our economy so that it can be
continues to generate speculation, rumour more resilient.
and possible misinformation. We encourage
the Government to provide some information Even as we call on Government to provide
as soon as possible to reduce the level of more specific details of its planned expenditure
speculation and to enable businesses and management initiatives and the debt exchange
households to plan effectively. programme in particular, we recognise that
we also have our part to play by working
Other medium to longer term measures constructively with Government and other
announced as part of the Budget include: stakeholders to contribute where we can,
including honouring our own social and civic
• Imposition of a debt limit on non- obligations.
concessional financing, including placing a
moratorium on new financing for 2023; We call on others to join in this effort to help
steer our country through these difficult times
and to set our economy on a sustainable footing
for the long term.

3 Sector Reviews
Manufacturing 09
Financial Services 11
Public Financial Management 16
Infrastructure 20
Technology/Cyber 24
Legal/Regulatory Landscape 26

Manufacturing
Overview of the Manufacturing Sector
The manufacturing sector in Ghana experienced fluctuations in growth between 2018 and 2021
with the lowest growth of 1.9% recorded in 2020 due to the enforcement of mobility and border
restrictions. These restrictions were introduced to limit the spread of the coronavirus disease
(COVID-19) and this led to the slowdown of business operations and trade. Growth improved
significantly to 7.8% in 2021 following the easing of restrictions and the roll-out of vaccination
programmes globally. However, growth in the sector is projected to decline to 4.5% in 2022 as a
result of the impact of current macroeconomic challenges.
Figure 1: GDP Growth in the Manufacturing Sector
9%
7.8%
8%
7% 6.3%
6%
5% 4.5%
4.1%
4%
3%
1.9%
2%
1%
0%
2018 2019 2020 2021 2022*
*Projected GDP growth for 2022 Source: 2023 Budget Statement
Globally, the sector continues to contend with the aftermath of the COVID-19 pandemic coupled
with the ongoing Russia-Ukraine war. These events have contributed to major disruptions in
global supply and value chains as well as the slowdown in growth across world economies.
A key fallout from these events has been the escalating price levels.
In a bid to resolve the historical structural issues of the Ghanaian economy, there is increased
focus on import substitution and export-oriented industries.

Key Initiatives from the 2023 Budget
Implementation of Establishment of Introduction of three Establishment of a

the components Export Trade Houses additional vehicle private equity fund with
manufacturing policy (“ETHs”) in selected assembly plants under an initial capitalisation
to support the production markets to promote the Ghana Automotive of GH¢400 million to
and supply of components made-in-Ghana Development support Small and
and spare parts for the products. Programme. Medium Enterprises
automotive industry. (“SMEs”) with equity
funding.
Establishment of a Development of Facilitation of the Withdrawal of Completion of the

GH¢500 million special Special Economic entry of 200 Ghanaian forex support on Textile and Garment
credit programme – Zones (“SEZ”) companies into the importation of Manufacturing, and
Development Bank policy under the African Market under specific goods and Pharmaceutical
Ghana (“DBG”) the Africa Continental non-critical products policies.
Ghana Economic
Emergency Economic Free Trade Agreement to help curb further
Transformation
Programme (“DEEP”) to (“AfCFTA”) and 360 depreciation of the
support businesses in Project (“GETP”).
women and youth-led Ghana cedi.
the agribusiness value SMEs.
chain.
Government’s commitment to making Ghana of measures to strengthen company internal

a globally competitive manufacturing and structures will afford local companies the
trading hub in Africa as underpinned by the opportunity to benefit from economies
Ten Point Industrial Transformational of scale as well as increased competitive
Agenda is commendable. This is also aligned advantage.
with the priority areas identified in the
African Union (“AU”) Agenda 2063. Given the The Bank of Ghana’s directive to withdraw
increasing global focus on climate change, forex support for the importation of specific
Government should consider implementing goods and non-critical products which could
policies that incentivise industrial and be produced locally is laudable. In addition to
manufacturing establishments introduced encouraging the consumption of locally
in the country to employ alternative and produced goods, this will in the long-term
sustainable energy solutions and practices help stabilise the Ghana cedi. However,
that help to reduce emissions and mitigate the success of this initiative will depend on
the long-term effects of climate change. Government’s commitment and the industry’s
capacity to meet any substantial increases in
The ongoing AfCFTA implementation presents demand for the locally produced goods in a
several opportunities for manufacturing sustainable manner.
companies, including potential access to
wider markets, supply and value chains.
Local manufacturing companies will need to
be strategically positioned to take advantage
of the opportunities AfCFTA presents.
The pursuit of strategies such as the

integration of local companies operating
within the same sector or the implementation Edward Gomado
Assurance Partner
PwC Ghana
[email protected]
www

Financial Services
The Budget is hinged on the positive outcome of three (3) critical imperatives, which are outlined as:
Successfully
Successfullynegotiating Coordinating an
Coordinating an equitable
equitable Attractingsignificant
Attracting significant green
anegotiating
strong IMF support
a strong debt operation programme green investments
investments
debt operation programme
programme
IMF programme
An efficient and well-performing financial services sector is key to driving this agenda given the
contribution this sector makes to the GDP of the services subsector. The financial services sector
is expected to drive the foreign exchange reforms initiated by the Bank of Ghana, strategic focus
on agricultural initiatives, and the eventual outcome of the IMF programme.
Banking
The banking subsector is essential in ensuring
that there is free flow of funds within the
economy with the Bank of Ghana playing a
significant role in the expected restoration of
macroeconomic stability and acceleration of
economic transformation. Government expects
the sector to drive a number of interventions
including:
• FX Reforms
• Agriculture Financing
• Digital Initiatives
• Private Sector Focus Funding
• Boosting Agribusiness

Banking Interventions
Development Bank of Ghana Other Commercial Banks and

Bank of Ghana
(“DBG”) relevant banking sector institutions
FX Reforms Focus on Agriculture Financing Boosting Agribusiness

• Overseeing and ensuring • Government through DBG, • Agreements between Ministry
compliance with legal and Ghana Incentive-Based of Finance and ABSA, ADB and
regulatory framework on Risk sharing System for STANBIC to operationalise the
foreign exchange. Agricultural Lending (GIRSAL) Interest Rate Subsidy Scheme
• Expanding the Gold and the Ghana Commodity which currently has identified
purchase programme Exchange (GCX) has 23 agribusinesses in the rice,
to support FX Reserve commenced engagements soya and poultry value chains for
accumulation and with the private sector to support.
promote local currency develop a strategic plan • MoUs with the Ghana
stability. that will serve as the basis Association of Banks (“GAB”)
• Purchasing foreign for intervention to formalise for the implementation of
currency mining and improve the domestic the YouStart Commercial
companies and aggregator system. Programme.
international oil • DBG to approve GH₵500 • Agreements with 11 commercial
companies to address the million special credit banks for the implementation
significant local currency programme dubbed “the of the YouStart Commercial
depreciation. DBG Emergency Economic Programme.
• Continuing the special Programme (“DEEP”) to • ARB Apex Bank and its network
Forex Auction for Bulk Oil support businesses in the of banks to support prioritised
Distribution Companies agribusiness value chain sectors in the rural economy
(“BDC’s”) to assist over the next 5 years with through interest rate subsidies
with the importation of a focus on priority sectors and direct financing under
petroleum products including poultry, cereals, the AfDB-supported Post-
• Elimination of foreign pharmaceuticals, tourism, Covid Skills and Productivity
exchange assistance for textiles and garments. Enhancement Project.
the importation of non- • Onboarding of 4 Participating
essential goods that can Digital Initiatives Financial Institutions (PFI’s)
be made domestically. • DBG to assist in the to assist DBG expand loan
implementation of significant channels.
interventions such as
YouStart, Economic Enclaves,
1D1F and Tech Hubs.
Private Sector Focus Funding

• Commencement of processes
to establish private equity
fund to support SMEs with
equity funding.

Banking
Bank of Ghana would require support from all economic actors, public and private in complying
with the foreign exchange policies outlined in the Budget Statement in order to improve the
Cedi’s performance against major trading currencies. It is our expectation that the Central
Bank’s engagement with the IMF would result in positive outcomes which are expected to curtail
the continuous depreciation of the local currency. The Budget indicates that a debt exchange
programme will be the preferred approach to the impending debt restructuring. Although the
details of the programme remain unclear, any debt exchange programme would impact financial
services institutions as they hold significant investments in Government bonds and treasury bills.
DBG’s role in supporting the achievement of the 2023 Budget objectives is clearly defined
and focuses mainly on agriculture, entrepreneurship and value addition. The various funding
initiatives should improve access to credit and in turn encourage local production of food and
other items thereby reducing the dependence on imports and its attendant forex issues. It would
be interesting to understand how DBG’s private equity fund would provide support to SMEs as
well as monitor and supervise them to ensure effective use of the funding to be provided. A clear
understanding and agreement on the timelines for achieving the desired results is key.
From our review of the Budget, it is unclear the incentives to be provided (if any) in the form
of subsidies and Government reliefs to financial institutions for their involvement in some of
the flagship interventions and programmes. The current macroeconomic conditions mean the
Government is on a revenue drive and seeks to reduce subsidies and incentives. However, there
may be a case to incentivise commercial banks to encourage their full participation to support the
target businesses of the respective programmes.
Insurance
The National Insurance Commission (NIC) through the Ghana Agricultural Insurance Pool (GAIP)
is expected to spearhead the development of agricultural insurance for farmers. GAIP provides
traditional agricultural insurance and an index-based weather insurance products to commercial
farmers and small-holder farmers. Eligible farmers are set to benefit from an estimated US$400
million in agricultural insurance in 2023 according to the Budget Statement.
In the face of climate change, weather-related risks hinder agricultural productivity gains,
therefore weather-related agriculture insurance will be very beneficial to commercial farmers.
However, penetration and accessibility may be a challenge. In tandem with Government’s vision
to promote agriculture and champion the consumption of locally produced food, insurance
companies may require incentives to increase awareness of this product and augment the efforts
of GAIP to enrol more commercial farmers onto this product. A good consideration will be to add
this as a requirement to access credit from Government’s funding initiatives for agriculture. It will
also be helpful for the Government/ GAIP to elaborate on the eligibility criteria.

Pensions
National Pensions Regulatory Authority (NPRA)
has enrolled 6.2% (476,213 persons) of the
country’s workforce on the 3rd Tier pension
scheme. The Authority, with the help of the
Cocoa Farmers Pension Scheme, aims to
further increase this to 15% in 2023.
The projected increase in the membership of

the Tier 3 Scheme may drive the growth of
Assets Under Management (AUM). However,
given that increase in membership does
not necessarily translate into proportionate
increase in value of contribution (i.e. informal
contribution is less regular and income levels
fluctuate easily), Government and NPRA
must actively intensify education of the target
group. The National Pensions (Amendment) bill
may provide more clarity on the aspiration of
Government in this regard.
Capital markets
Based on a recent Debt Sustainability Assessment conducted by the Ministry of Finance, Ghana
is considered to be at high risk of debt distress. Government plans to implement a debt exchange
programme to address challenges identified in the country’s debt portfolio in collaboration with
relevant stakeholders including the Ghanaian public, investor community and development
partners.
The capital market has in the recent past recorded significant withdrawals of clients’ investments
following speculations about the Government’s debt restructuring programme. In response to
the development, the Securities and Exchange Commission, in a directive dated 20 October
2022, instructed market operators to adopt the Mark-to-Market approach in valuing clients’
investments. This affected the market value of clients’ investments, thus accelerating the pace of
investment withdrawals. The official announcement of the proposed debt exchange programme,
as captured in the 2023 Budget Statement is likely to further spur the rate of client investment
withdrawals, potentially creating liquidity challenges for market actors.

Investor Protection Fund
The Government plans to set up an Investor Protection Fund. To this end, the Government
intends to propose an amendment to the Securities Industry Act, 2016 (Act 929) which provides a
legal framework for the establishment of the Investor Protection Fund.
An Investor Protection Fund may ensure that investors are compensated in the event of a
defaulting debt holders’ asset not being sufficient to meet investors’ admitted claims. In our view,
this may contribute to the restoration of investor confidence which appears to be low due to the
various rating downgrades and the recent decline in investment valuations. Investors will be keen
to know the extent of protection, source of funding and the autonomy of the Fund as they will
expect to draw confidence from this initiative.
FOR
SALE
National Home Ownership and Investment Scheme

Government plans to develop a legal and regulatory framework for the National Home Ownership
and Investment Scheme and pursue a continuous skills development programme for the Ghana
Institute of Securities.
Homes are underlying assets for a significant portion of investments in the capital markets. The
proposed arrangement to develop relevant legislation to regulate home ownership investment
schemes is therefore welcome since it is likely to enhance investments in the real estate industry.

Public Financial Management
Introduction Ghana’s previous IMF programme in April
The Budget presented to Parliament by 2015 was anchored on the need for strong
the Minister for Finance, Ken Ofori Atta on PFM reforms; it is therefore not surprising
24 November 2022 seeks to implement that the Finance Minister announced various
reforms that will enhance Public Financial PFM reforms and expenditure measures in
Management (PFM) but more importantly, the presentation of the 2023 Budget. Most of
restore and sustain macroeconomic these measures are likely to be included in
stability and resilience through inclusive the ongoing IMF negotiations.
growth and value addition. These measures
include among others revenue mobilisation, It is also worth noting that the Public
strengthening internal audit function in Expenditure and Financial Accountability
MDAs, restructuring of the Internal Audit (PEFA) assessment conducted in 2018
Agency, expenditure commitment and revealed some key weaknesses and gaps
procurement control and enforcement of in Ghana’s PFM systems. It is fulfilling to
sanctions under the PFM. note that a five-year PFM Strategy (2022
- 2026) has been developed to address
Specifically, Government is seeking to the weaknesses identified. The strategic
strengthen internal audit functions; enhance activities outlined will need to be adequately
the credibility of the budget process; funded to enable Government address and
continue the implementation of the Ghana achieve the measures outlined. In addition,
Integrated Financial Management Information strict enforcement of applicable PFM laws
System (GIFMIS); carry out payroll reforms and regulations will be required to achieve
and audit as well as State Owned Enterprise the desired results.
(SOE) reforms and comprehensive public
sector reform.
Given the macroeconomic pressures as a

result of the unsustainable debt stock, rising
inflation, depreciation of the cedi and the
twin effects of COVID-19 and the Russia-
Ukraine war, the Government has initiated
discussions with the IMF on a new country
programme to help restore macro-economic
stability.

The scope of GIFMIS implementation has
been limited to the Consolidated Fund
and certain IGF sources over the years. In
addition, not all MDAs/MMDAs have been
able to fully utilise GIFMIS due to operational
challenges.
There is a critical need to extend both

the coverage and scope to all covered
entities and funding sources in order for
Government to achieve full compliance with
the International Public Sector Accounting
Standards (IPSAS) which the Government
adopted to implement in 2014.
In line with PFM regulations and to

support adequate reporting as required
by international standards, there are key
GIFMIS Implementation and Enforcement
modules such as inventory management,
The 2023 Budget Statement indicated that order management, treasury management
all Government expenditure transactions and Enterprise Asset Management (eAM)
are expected to be processed through that need to be implemented.
GIFMIS or any other electronic platform in
use by the Government in line with Section These modules will ensure efficient
25(6) of the PFM Act; otherwise appropriate transaction processing through automation
sanctions would be applied to defaulters. of business processes, enhance reporting
and accountability across institutions and
The Government of Ghana’s measure perform Automatic Bank Reconciliation
to migrate all earmarked funds namely (ABR), a non-existent function in GIFMIS
consolidated funds, statutory funds, currently.
Internally Generated Funds (IGF), and donor
funds onto the GIFMIS platform by 2023 is The above measures require additional
commendable. The migration will address investment to improve the GIFMIS
completeness in financial reporting, a major functionality and usage by all entities.
challenge of GIFMIS since inception. It is imperative for Government to
provide adequate funding to drive these
The integration of GIFMIS and interfaces improvements.
with other key institutional databases such
as GRA revenue management systems,
Ghana Integrated Electronic Procurement
System (GHANEPS) are key to ensure
transparent reporting and wider stakeholder
participation in key areas of the Public
Financial management cycle.
GIFMIS remains the core financial

management system for Government of
Ghana, Covered Entities subsisting on the
Consolidated Fund Resources and other
Public Funds, such as Internally Generated
Funds (IGF), Statutory and Donor Funds.

Ministers, Deputy Ministers and other
political office holders, negotiate public
sector wages, manage public sector hiring
within current budgetary constraints, reduce
fuel allocations to political appointees and
heads of MDAs, MMDAs and SOEs by 50%,
among others.
While these measures may lead to

expenditure reduction, we believe that
there is the need to downsize Government
Human Resource Management and Payroll machinery in addition to the implementation
of the measures outlined, to achieve a more
The 2023 Budget highlighted some key sustainable outcome.
interventions with respect to payroll and
human resource management. These include, Several calls have been made on the review
among others, the freeze on all public sector of Government’s flagship programmes such
employment, expunging ghost names from as the Free Senior High School (Free SHS),
payroll through periodic audits, linking of the One District one Factory, Planting for Food
Ghana card to the payroll, placing moratorium and Jobs, Livelihood Empowerment Against
on granting of extension of employment after Poverty (LEAP), School Feeding Programme
retirement and completing the roll-out of among others. The recommendations from
HRMIS and its integration to the payroll and the ongoing Public Expenditure Review
GIFMIS. (PER) exercise by the World Bank should
lead to structural reforms of some of these
Projected expenditure for compensation initiatives which have been a huge burden on
of employees for 2023 is 24% of total Government expenditure, notwithstanding
Government expenditure after interest the good intention of Government for the
payment. The Minister for Finance indicated introduction of these programmes.
that HRMIS for payroll costs will be interfaced
with GIFMIS to further eliminate ghost names Finally, Government should speed up
and reduce Government compensation the full implementation of the GHANEPS
of employees expenditure considerably. and address any challenges emanating
As negotiations with the IMF are currently from the pilot programme. This system
ongoing, this is a critical area of reforms as noted by Government is expected
that need to be undertaken to cut down to promote procurement transparency,
expenditure. However, whilst we agree with the budget commitment control and enhance
Government on these measures, key sectors accountability.
such as education and health should be given
key consideration and should not be hampered Government should enforce the various
by the freeze on public sector employment. provisions in the Public Procurement Act as
well as the PFM Act in addition to the related
controls and approvals as outlined in the
Expenditure Management and Procurement 2023 budget statement.
Control
Government proposed key expenditure
measures in the 2023 Budget to support
its fiscal consolidation. These include the
reduction of the earmarked funds from the
current 25% of tax revenue to 17.5% of tax
revenue, continue action of the 30% reduction
of salaries of the President, Vice President

Strengthening of Internal and External Audit
Functions
Government indicated the restructuring of the
Internal Audit Agency’s operations to, among
others, provide the needed independence,
technical capacity and professionalism to
support the fight against financial irregularities
in public institutions.
As we commend the Government for this

effort, we want to emphasise that this process
needs to be fast-tracked. The recent name
and shame publications by the Internal Audit
Agency should be commended.
All Covered Entities are enjoined under the

Public Financial Management Act, 2016 (Act
921) to prepare annual statements indicating
the status of implementation of all external and
internal audit recommendations, and forward
same to the Minister, Parliament, Office of the
President and the Auditor-General within six
months after the end of each financial year.
However, PFM oversight capabilities of
The Ministry of Finance has also established Parliament will need to be improved to
a system for the review of all the annual enforce punitive measures against actors
statements submitted by Covered Entities who disregard the PFM Act.
with strong follow-up action by Government to
ensure compliance and strengthen the internal Whilst the recovery of GH¢2.2 billion out of
control environment in Public Institutions. approximately GH₵4.0 billion disallowed
expenditure for 2017 to 2020 reported to
The external audit and parliamentary scrutiny Parliament by the Audit Service Recovery
are to ensure that transparency, accountability Task Force is commendable, measures to
and integrity is upheld and that public entities ensure timely audits and review of audit
are held accountable for their decisions and reports will make the legislative scrutiny
actions as well as omissions in managing more relevant and effective.
public resources.
We believe the strict enforcement of
the various PFM initiatives and reforms
outlined in the 2023 Budget and effective
collaboration among relevant PFM
actors and agencies will be key for the
Government in restoring trust and sustaining
macroeconomic stability and resilience.
Hayfron Aboagye
Assurance Partner
PwC Ghana
[email protected]
www

Infrastructure
Introduction
Infrastructure remains an important driver
of Ghana’s economic growth through
connectivity, trade and providing access
to key amenities such as electricity, water,
healthcare, amongst others.
Government continues to show

commitment to the development of the
country’s key infrastructure as it looks to
spend approximately GH¢10.2 billion on
related projects and initiatives in 2023.
This represents an 11% increase from the
prior year compared to 30% and 23%
increases in 2022 and 2021 respectively.
It also indicates Government’s re-focus to
limit fiscal spending in light of the current
economic challenges.
The spending constraint presents the

opportunity to review and innovate
infrastructure financing, planning and
development to reduce the spending We believe that a suitable tolling structure as
pressure on public funds. In general, well as the steps taken to prepare for viability
Government is looking to spend more gap funding in the proposed transaction, will
of the budgeted funds in improving be important to attract the investor interest in
and developing roads (52%), water and the Accra -Tema Motorway Project and other
sanitation (18%), transport infrastructure road projects.
such as railways, ports and airports (18%)
and other infrastructure (12%). In recent years, the Government has been
keen to revamp the railway sector as part
Transport and Logistics of efforts to support the industrialisation
Government continues to invest in drive. Together with Ghana’s road, airport
supporting the maintenance, upgrade and and port infrastructure, the railway subsector
development of road, drainage and bridge has an important role in trade facilitation
infrastructure across the country. We have and in positioning Ghana as a key multi-
noted that the Government intends to modal hub within the West African sub-
reintroduce road tolls as it plans to structure region. Landlocked countries such as Mali,
a Public Private Partnership arrangement Burkina Faso and Niger could potentially be
to develop the Accra-Tema Motorway and attracted to use Ghana’s rail infrastructure
Extensions Project. for their exports and imports if it is made
competitively advantageous.
This includes water, sanitation, housing and communications

Ghana’s rail infrastructure also provides Energy
the country with a more suitable option to Ghana’s power sector infrastructure
transport ores and other minerals from the continues to see investment and strategic
mines to processing plants and ports. A key decisions to expand power supply capacity
example here is the Western Line, which while managing power transmission and
has sections planned for completion in distribution challenges.
2023.
With access to electricity improving in
Given the capital-intensive nature of rail recent years, Government must prioritise
projects and the current public spending sustainable solutions by harnessing the
constraints, rail infrastructure development opportunities from renewable energy
in Ghana will benefit from some more across the country.
strategic investment, particularly under
Public-Private Partnership concession The Government has taken steps towards
arrangements. Government has taken Renewable and Alternative Energy
important steps to support the development Development Programme including initiatives
of the technical capacity of human such as the 912kW Jubilee Solar PV Project
resources in the sector. Building local and the Nuclear Power Programme. Going
capacity will be important as the country’s forward, collaboration with the private sector,
railway network develops and creates job channelling lessons from other countries
opportunities across the country. and encouraging investment in resilient
and sustainable power infrastructure will be
Ghana’s port and airport infrastructure important in achieving Ghana’s Net
development is crucial in positioning Zero ambitions per its Energy Transition
Ghana as a multimodal transport hub in Framework. Harnessing Ghana’s natural
the subregion. The impact of this could gas resources to encourage the use of
include the promotion of more efficient cleaner energy in power generation is a step
trade facilitation channels and support for in the right direction. However, adequate
the development of other economic sectors planning and the supporting infrastructure
including tourism. With strategic planning must be developed to ensure that this can
and investment in the key infrastructure and be sustained in the long term.
its associated ecosystem, the country can
generate more diversified revenue to
support economic growth.
Some of the key projects indicated at

various stages of development, planned
to be completed or set to commence
in 2023 include the Construction of the
Boankra Inland Logistics Terminal (BILT) ,
Takoradi Port Expansion Project, Volta Lake
Transport Improvement Project, Kumasi
Airport Expansion Project (Phase II), Tamale
International Airport and Sunyani Airport
(Phase II).

Other Infrastructure
In the 2023 Budget Statement, the Water and Sanitation sub-sector has seen one of the most
significant expenditure allocation increases compared to the other infrastructure sub-sectors
for 2023. This demonstrates Government’s commitment to propel the country to achieve clean
water and sanitation for all. In 2023, the Government plans to extend its construction of water
supply facilities across key cities and towns in the country with a special focus on rural water
supply through the Rural Water Management Programme.
With large scale programmes such the Greater Accra and Greater Kumasi Metropolitan Water
and Sanitation Project, Government initiatives will be key in providing access to sanitation
infrastructure, improving liquid and solid waste management across the country.
Natural reserves, heritage sites and other locations of cultural value in Ghana demonstrate
the country’s important tourism potential. The sector has the potential to support the
diversification of Government’s revenue sources while creating employment and income
opportunities to support inclusive and sustainable development. Government should continue
to explore strategic partnerships and investment in eco-tourism as well as the associated
hospitality and leisure infrastructure to help maximise the economic potential of the sector.
Government’s consideration of the PPP approach is a step in the right direction to promote
private investment and more efficient management of these facilities.
Outlook for Ghana’s Infrastructure Sector

Government has taken steps to help position Ghana’s infrastructure and other sectors to
be more sustainable and focus on climate resilience. This is an encouraging approach to
driving sustainable outcomes for Ghana’s socio-economic development. Green financing
is increasingly becoming an important and competitive source of funding for infrastructure
development.
More importantly, the terms and conditions usually associated with green financing help put
in place measures to enforce Environmental, Social and Governance (ESG) considerations
and compliance. Collaboration with the private sector to invest in Ghana’s infrastructure
development across its key economic sectors remains important. However, it is important
that these arrangements are strategically planned and implemented to ensure mutual benefit
to Government and private proponents but more importantly provide resilient and sustainable
developments that will help drive Ghana’s economic growth.

Infrastructure Sector Budget Allocation Summary
Ministry of Ministry of Ministry Ministry of Ministry of

Roads and Transport of Railway Works and Sanitation
Highways Development Housing and Water
Resources
[GH₵5.2 billion] [GH₵1.2 billion] [GH₵618 million] [GH₵474 million] [GH₵1.8 billion]
Total allocated expenditure for the sector: GH₵10.2 billion
Development of 27.7km of
the Accra-Tema Motorway and Some Key Implementation of the Tarkwa
Extensions Project Water Supply Project
Infrastructure
Projects Planned
for 2023
Development of Phase I of the Container Development of Phase

and Multi-Purpose Terminal with a 600m II of Sunyani Airport
quay wall at the Takoradi Port
Completion of Construction and

Operationalisation of the 97.9 km Tema-
Mpakadan Railway Line ( Standard Gauge)
Winfred King
Associate Director
PwC Ghana
[email protected]
www

Technology/Cyber
Efforts to digitalise the Ghanaian economy Government should consider further
with specific focus on the Ghana card strenthening of the national identity database
as a single point of identification for by consolidating national biometrics and
citizens to access all national services is non-biometric identity data from various
commendable. sources (Electoral Commision, SSNIT and
the Passport Office ) under the National
The registration, however, has faced certain Identification Authority per the NIA Act. This
challenges. Most critical of these is the will ensure better enforcement of information
credibility of the data. Even though the security controls, focus national security
National Identification Authority (NIA) has efforts and provide much more insight into
taken measures to prevent the capturing individual financial activities for tax planning
of invalid data; this achievement can only purposes.
be cemented through systematic artificial
intelligence-based data cleansing. Per the NIA act, only the National
Identification Authority is mandated to hold
Riding on progress made in the Ghana card and handle biometric data of citizens.
registration exercise, the Ministry of
Communication and Digitalisation charged
users of telecommunication services to
ensure registration of all SIM cards by end
of November 2022, failing which sim cards
would be deactivated. The implementation
of this directive has been wavy for the
most part leading to many discomforting
experiences for the Telcos and their
customers as well as the Ministry itself.
As at October 2022, 18.9 million SIMs

(44.28%) of mobile numbers had been
successfully registered and linked to
respective Ghana card IDs. Similarly the
Ghana Revenue Authority, banks, pensions
and related institutions have commenced
the processes of registering and mapping
existing profiles with the Ghana Card IDs of
customers.

E-Levy
The introduction of the e-levy in 2022 and further
withdrawal of the daily non-taxable threshold of
GH₵100 is a threat to the digitisation agenda of E-LEVY
Government and may slow down the growth and
eat away some of the gains made.
Increases in Telecommunications cost and data

charges
The proposed 15% increase in data charges by the
telecommunications chamber as announced on 11
November 2022, also has the potential to derail
significant gains made by the country in the digital
adoptions rate in-country and should be carefully
considered.
The Government of Ghana should consider the reduction of Communications Service Tax to
ease the burden on citizens. This could have a ripple effect of improving the digitisation of the
economy.
Maxwell Darkwa
Technology Partner
PwC Ghana
[email protected]
www

Legal/Regulatory Landscape
Review of the 1992 Constitution
Government, under the auspices of the Ministry
of Parliamentary Affairs, intends to engage key
stakeholders such as Parliament, the Electoral
Commission, Political Parties among others
with the view to building consensus towards
the review of the 1992 Constitution of Ghana.
The Electoral Commission would also be

supported to perform its regulatory function
in support of political parties by reducing the
incidence of monetisation in politics.
By addressing the dual crises of debt and
While citizens and key actors in the private climate change, Government intends to build
and public sectors generally agree to the climate-proof resilience into the economy,
need for the review of Ghana’s Constitution, with the aim to better equip the country to
there have been some disagreements handle future shocks and protect existing
among key stakeholders due to the content infrastructure, property, lives and livelihoods.
of the proposed changes and the mode of
implemention of the review. Government’s engagement of the private
sector will focus on increased private capital
It is therefore commendable that the investments via public-private partnerships,
Government plans to prioritise consensus climate resilient infrastructure projects, and
building among key stakeholders prior to voluntary and compliance carbon markets.
commencing the review process. We urge Government also plans to encourage
everyone involved in the constitutional review responsible and sustainable small-scale
implementation to focus on critical issues that mining in 2023 and beyond.
most people generally agree need changing.
While a law on Public-private partnerships
exists, Government needs to expand the
Climate Change and responsible mining scope of the law to address the debt for
Government plans to use bilateral climate change initiative or initiate a new
engagements to expand consultations on law addressing all pertinent issues arising
debt-for-nature swaps while increasing private from this proposal. Government may also
sector investments as key opportunities for consider incentivising private investors in
accelerating the transition to low carbon these sectors to achieve its objectives.
growth.
It is important that the scourge of illegal
mining is tackled but at the same time,
Goverment must focus on delivering
alternative livelihood empowerment
programmes for persons who may
be displaced as a result.

Proposed Laws/Bills for the Regulation of Social Services
Government has laid before Parliament a number of laws concerning Pensions, Wildlife
Resources Management, Intestate Succession, Ghana Commission for UNESCO, National
Vaccine Institute, and Grains Development Authority. In 2023, Government will draft and present
42 proposed laws which among others will concern matters such as Advertising Council, Aged
Persons, Affirmative Action (Gender Equality), Atomic Energy Commission, Anti-Doping,
Broadcasting, Chemical Weapons and Industrial and Consumer Chemicals, Child Justice
Administration, Children, Civil Service, Cooperatives, Community Service Sentencing and
Consumer Protection.
When passed, Ghana will for the first time have a law regulating consumer protection,
community sentencing and affirmative action and assented by Parliament and the President
respectively. We expect these laws to provide a bundle of rights and responsibilities for citizens
while providing a legal basis for regulatory action state agencies may exert on subjects.
Government also expects to deepen the implementation of the Right to Information (RTI) Law
across public institutions, implement a framework for the safety of journalists in Ghana, enact a
new Broadcasting law and pass a subsidiary legislation for the RTI Act.
The role of the media as the fourth estate in a democratic country like Ghana cannot be
overemphasised. We therefore agree with the Government on the need for journalists to be
protected from intimidation and violence. At the same time, journalists must prioritise
professionalism, neutrality and defence of our democracy at all times in their work.
Government may consider using the National Commission for Civic Education (NCCE) in the
education on the RTI law throughout the country so there is an increase in requisitions of
information under the RTI law from the general public.
Kingsley Owusu-Ewli
Tax Partner
PwC Ghana
[email protected]
www

4 Tax Matters
Abeku Gyan-Quansah
Tax Partner
PwC Ghana
[email protected]
www

Direct Taxes
The provisional performance for income and
property taxes (“direct taxes”) for the first nine
months was GH¢24.79 billion compared to a
programmed amount of GH¢25.60 billion. This
resulted in a 3.16% adverse variance and mainly
accounts for the shortfall in total tax revenues
by 2.68% for the first nine months of the year.
Government expects that by the close of 2022,
total direct tax revenue will be GH¢39.59 billion
as against a budgeted amount of GH¢38.98
billion. This means that by the end of the year,
direct taxes will be expected to be close to
target with a favourable variance of 1.56%
(GH¢0.61 billion).
In 2023, Government expects to mobilise direct tax revenues of GH¢59.81 billion, representing
an ambitious 51.07% growth over the projected outturn for 2022. To achieve this revenue growth,
some tax policy measures have been announced to complement existing measures. The direct
tax policy measures proposed include the following:
Government proposes to review the upper limits for vehicle benefits given to individuals.
Review of the upper
limits for vehicle
benefits provided The provision of motor vehicle and/or fuel to leaders of an entity or its employees may
to individuals result in additional tax payments if the vehicle or fuel benefit is available for private use
of that individual. Currently, the maximum taxable amount for such benefits is GH¢600
per month.
We agree with Government’s proposal to review the upper limit of such benefits. This is
because the monthly deemed benefits have remained unchanged since 2016 and do not
currently reflect the typical vehicle running expenses per month. However, in revising the
upper limits, Government should recognise that such motor vehicles are typically used
for both business and private purposes and as such the deemed benefit should be less
than the typical running cost per month. In our estimation, any deemed benefit that is
more than 30% of the average monthly running cost may be excessive. In addition, we
recommend that the upper limits should be indexed to avoid situations where there are
no revisions for a long period.
We recommend that entities providing such benefits should review the contracts under
which such provisions are made and prepare to update payment (for example payroll)
systems as soon as the amendments are publicised. There may be the need to gross-
up related payments, for example, salaries to ensure that salaries are not eroded by the
additional taxes arising from the change in the upper limits.

Government has proposed to introduce an additional income tax band with a
Additional income marginal tax rate of 35%.
tax band with a
marginal tax rate
of 35% Government intends to re-introduce a 35% marginal tax rate for resident individuals,
a repeat of what was enforced in August 2018. After several pushbacks, the rate was
reduced to 30% applicable to monthly equivalent chargeable income above GH¢20,000
from January 2019 to date.
We do not agree with Government’s proposal to increase the top tax rate for resident
individuals to 35% especially at a time when the inflation rate is in excess of 40%. Even
without an introduction of the 35% tax rate, the real take-home income of compliant
individuals is reduced. The introduction of a 35% increment will effectively and
significantly apply only to those employed in the formal sector and make them worse off
with reduced scope for savings and investments required for the economic growth of our
country. The proposed increase will further reduce the attractiveness to operate in the
formal sector thereby increasing the proportion of the informal sector with its undesirable
consequences. We recommend that Government rather focuses on compliance to
reduce the PAYE to self-employed tax ratio projected to increase to over 18:1 for 2023.
Government should conduct a study to evaluate the extent to which the Ghana Card
project has improved tax revenue generation and make changes to achieve the intended
revenue generation objectives.
In addition, following recent practice, we expected the monthly equivalent tax-free

band to be increased from GH¢365 to about GH¢402, effective 1 January 2023, to
accommodate the agreed minimum wage increase. We propose that the minimum wage
should be made an exempt amount to avoid spending time and the nation’s resources to
follow the practice of revising tax bands as a result of minimum wage changes.
Although Government is yet to publicise the associated chargeable income range for
the 35% tax band, employers should identify those with fixed net salaries and plan
for an increased cost of employment. For employees without such protection clauses,
employers should consider the extent to which salaries can be increased to mitigate the
loss in net salary as a result of the increase in tax rate.
Introduction of Government proposes to introduce a return and a withholding tax rate on the gains
a return and a from realisation of assets and liabilities and review the optional tax rate of 15% on
withholding tax gains from realisation of capital assets for individuals.
rate on the gains
from realisation of
assets and liabilities Currently, individuals who make gains from the realisation of assets and liabilities are
and review of the expected to self-declare their gains when filing their annual income tax returns. As an
optional 15% tax alternative, such persons can opt to pay a separate 15% income tax on gains made
rate on such gains without consolidating with other income.
An express withholding tax rate on payment for capital assets should reduce disputes
arising on the withholding tax treatment of payment for such assets. This may however
not be the case for realisation of liabilities and we propose that the Government should
not introduce withholding tax on realisation of liabilities without very clear guidance. We
recommend that the withholding tax for payment of capital assets, where applicable,
should not be different from payment for non-capital assets. As such the base for the
withholding tax should be the gross (and not gains) and the withholding tax returns
should be the same. This will ease compliance and avoid disputes which tend to delay
Government revenues.
On the review of the 15% optional tax rate, we suggest that Government proceeds
carefully increasing the rate as it will have an adverse impact on investment decisions.
Any optional rate in excess of half of the top marginal income tax rate may be
counterproductive.

Government has proposed to introduce a minimum chargeable income system.
Implementation
of minimum
chargeable Minimum chargeable income system is where Government sets a threshold for
income system chargeable income for income tax purposes for specified persons. The threshold could
be a percentage of turnover or a formula based on some parameters. Where the actual
chargeable income of those persons are below the minimum threshold, they will be
required to apply the minimum chargeable income. This will likely apply to specified
persons including:
• Persons who continuously declare business or investment

losses for a long period of time;
• Businesses with smaller chargeable income that do not
reflect the nature of their operations;
• Businesses that do not maintain accurate accounting records; and
• Individuals whose chargeable incomes do not reflect their lifestyles.
Given that there is already a presumptive tax regime in our tax laws, we expect that
there will be much clarity on the minimum chargeable income system in order not
to confuse taxpayers. We also expect some exclusions/exemptions in order not to
overburden entities in certain sectors such as the financial services and the extractive
sectors. Further, the presumptive tax system should be reviewed or abolished (since
the revenue based tax aspect of the law has not been enforced for about 7 years) and
the minimum chargeable income system standardised for specified persons. Whatever
form the minimum chargeable income system will take, it could rake in more revenue
if compliance is heightened and sector specific circumstances are considered. To
encourage formalisation of businesses, the minimum chargeable income criteria for
audited businesses should be more attractive than that of unaudited business. Therefore,
assuming the criteria for audited businesses is say 1% of revenue, that for unaudited
businesses should be say 2%.
Unification of Government has proposed to unify provisions on carry forward of tax losses.
provisions on carry
forward of tax losses
Generally, businesses operating in Ghana can carry forward tax losses for three years.
Businesses operating in specified priority sectors can carry forward tax losses for five
years. The proposal by Government to unify the provisions on carry forward losses
would mean that all businesses in Ghana would be able to carry forward their tax losses
for the same number of years, irrespective of the sector they are engaged in.
If the general number of years businesses are allowed to carry forward is increased
to five years to align with that of the priority sectors, it would mean that taxpayers in
general would be able to utilise their accumulated tax losses for a longer period. On
the other hand, if the years granted to businesses in the priority sectors are reduced to
three years, the tax incentive for these priority sectors would be lost and that would be
counterproductive to businesses in these sectors.
We recommend that the carry forward years should not be reduced below five years.
This will give an incentive for businesses to take higher risk to help grow our economy.

Restriction of Government has proposed to restrict foreign exchange loss deduction to actual
foreign exchange losses and capitalise realised exchange loss on capital assets.
loss deduction to
actual losses and
capitalisation of Currently, taxpayers are permitted to deduct both realised and unrealised exchange
realised exchange losses. However, with the proposal to restrict foreign exchange loss deduction to actual
loss on capital losses, taxpayers will now be limited to foreign exchange losses that have been realised.
assets Given the rapid depreciation of the Ghana Cedi in recent times, taxpayers with exposure
to foreign exchange fluctuations will see an increase in their tax payable to the GRA as
any unrealised exchange losses will be disallowed.
Further, the proposal to capitalise realised exchange losses on capital assets is likely
to adopt the treatment under the old income tax law (the repealed Internal Revenue
Act). Under the repealed law such losses on capital assets were treated separately and
granted capital allowance at 10%. We will not encourage Government to adopt the
procedure under the repealed law as it made the treatment of such foreign exchange
losses difficult to define and track.
Businesses should plan and properly account for deferred taxes should the Government
implement the proposed changes.
Conversion of NFSL Government has proposed to convert the National Fiscal Stabilisation Levy (“NFSL”)
to GSL to cover all to Growth and Sustainability Levy (“GSL”) to cover all entities.
entities
The NFSL is a levy of 5% imposed on the profit before tax of companies and *institutions
operating in some specific sectors of the economy. The proposal is to extend the levy to
cover all entities with some variations as follows:
• Category A (5% of Profit before Tax): For existing NFSL entities plus six additional
sectors;
• Category B (2.5% of Profit before Tax): Excluding entities in Categories A and C;
• Category C (1% of Production): For entities operating in the extractive sector.
We recognise the need for additional revenue to finance legitimate Government

expenditure and a spread of the burden is more equitable. However, with this measure,
the Government should not introduce the 35% income tax rate.
The NFSL, now to be renamed as GSL, has always been presented as a temporary or
short-term measure since 2009 (with a gap year in 2012). The 2020 Budget and the
National Fiscal Stabilisation Levy (Amendment) Levy, 2019 (Act 1011) provided an end
date of December 2024 for the NFSL. With this announcement supported by projections
for 2025 (in the 2022 Budget Statement) and for 2025 and 2026 (in the 2023 Budget
Statement), we recommended that businesses should consider the NFSL/GSL as a non-
temporary income tax and plan their activities accordingly.
*The selected entities are banks (excluding rural and community banks), non-bank financial institutions, insurance companies, telecommunication companies,
breweries, inspection and valuation companies, mining support companies, and shipping lines, maritime and airport terminal operators.

Pursuance of Government has proposed to pursue Additional Oil Entitlement (“AOE”) from the
Additional Oil Jubilee Field.
Entitlement (“AOE”)
from the Jubilee
Field Under the current petroleum management laws of Ghana, Ghana is entitled to additional
percentage of oil companies’ share of crude oil on each separate field once profitability
passes a certain agreed rate of return. In the petroleum agreements entered into by
Government so far, AOE has been at a maximum of 30% Government take. Given that
tax provisions in petroleum agreements have already been negotiated by the State and
ratified by Parliament, it will be interesting to see whether the Government intends to
renegotiate existing petroleum agreements with the international oil companies or the
new measure will be applied to new petroleum agreements.
Upstream oil and gas entities operating in the Jubilee Field should engage independent
tax consultants to review their activities and plan for any unaccounted AOE.
Introduction of tax Government has proposed to introduce a tax on Gross Gaming Revenue to replace corporate
on Gross Gaming income tax and VAT. In addition, a token withholding tax on winnings will be introduced.
Revenue
Government’s proposal to introduce a tax on Gross Gaming Revenue to replace
corporate income tax and VAT on betting companies will help Government raise
revenue from companies in the lottery and betting industries. An obligation on betting
companies to withhold on lottery winnings before payout to winners would also help the
Government to tax the earnings of gamblers and also widen the tax net.
Regarding the proposal to introduce withholding tax on winnings, we recommend that

Government should reassess the decision to abolish the 5% marginal tax on lottery
winnings effective 2018. In the spirit of burden sharing, we recommend that lottery
winnings should be subject to the same withholding tax as winnings on other
games of chance.
Waiver of tax Government has proposed a waiver of tax on early withdrawals from Tier 3 Provident
on early Tier 3 Funds and Personal Pension schemes for eligible persons.
withdrawals
One of the measures introduced by the Government in 2020 to assist employees or self-
employed individuals who lost their jobs or businesses due to COVID-19 was a waiver
of the applicable taxes on early withdrawal from Tier 3 provident funds and personal
pension schemes. This policy measure has since been effected. Before the COVID-19
related measure was introduced, Tier 3 withdrawals from either:
• the provident fund scheme before its 10th anniversary by individuals in the formal
sector; or
• the personal pension scheme before its 5th anniversary by individuals in the informal
sector attracted a final withholding tax of 15% in law and practice.
With the new proposal introduced by the Government, all individuals from the formal
sector who lose their job permanently or capital due to the current economic crises
would also qualify for the waiver as a tax relief in 2023.
While this initiative is commendable, we recommend that guidelines should be issued

to provide clarity on the qualification criteria for accessing the tax relief, supporting
documentation required for eligibility, as well as the applicable timelines in order to
prevent abuse.

Revision of vehicle Government has proposed a review of the vehicle income tax and income tax stamps
income tax and
income tax stamps
In 2021, Government introduced some COVID-19 alleviation measures which included
the suspension of vehicle income tax and income tax stamps for some qualifying traders,
transport providers and other service providers. The proposal to restore and revise
vehicle income tax and income tax stamps will increase the tax payable by affected
persons, and also lead to hikes in transport fares. The measure would certainly help
Government to raise revenue from self-employed persons operating in the informal
sector. This move will certainly expand the tax base of the country and the new rates to
be charged should be sufficient to reflect the volume of income earned by the respective
self-employed persons.
The Vehicle Income Tax Sticker and Income Tax Stamp rates were last reviewed in 2013.
Therefore, we recommend that going forward the amount should be indexed to say prior
year inflation so the amount remains realistic.
Indirect Taxes
As our economy navigates the impacts of the global pandemic and the Russia-Ukraine crisis, the
provisional performance for taxes on domestic supply of goods and services and international
trade (jointly referred to as “indirect taxes”) for the three quarters of 2022 stood at GH¢27.11
billion, compared to a programmed amount of GH¢26.92 billion. Despite the projected shortfall
from VAT, E-Levy and excise taxes, there is an overall 0.7% favourable variance from indirect
taxes for the first nine months. Revenue from international trade taxes, NHIL, GETFL, CHRL
and CST accounts for the favourable variance for the first nine months. Government expects to
collect an amount of GH¢39.53 billion in indirect taxes by the end 2022. This would represent
a GH¢0.93 billion excess over the revised 2022 target. For 2023, Government intends to grow
indirect tax revenue by 49% to GH¢58.90 billion and increase it to GH¢110.74 billion by 2026.
Government seeks to grow revenues by limiting exemptions, roping in the informal sector and
enhancing compliance. The proposed measures made in respect of indirect taxes are as follows:

Increase in the Government has proposed an increase in the standard VAT rate from 12.5% to 15% of the
standard Value taxable value of supplies.
Added Tax (“VAT”)
rate
The standard VAT rate which is imposed on the supply of taxable goods and services
is expected to see an upward adjustment in rate by 20% (that is from 12.5% to 15%).
Government is targeting an additional GH¢2.7 billion from the increase in the VAT rate
to support road infrastructure development and fund the Government’s digitalisation
agenda.
If the tax measure is approved without significant modifications, the effective standard
VAT (plus associated levies of NHIL, GETFL and CHRL) rate on supplies will increase
from 19.25% to 21.9%, effectively making the standard VAT rate 15.9% according to
GRA’s procedure for determining taxes. The increase in the VAT rate may lead to hikes in
prices of general goods and services which will further worsen the inflation rates in our
country.
We hope that Government will consider the following with the aim of restoring
macroeconomic stability and accelerating economic transformation:
• consolidate the associated levies of NHIL and GETFL with VAT and set the standard
VAT rate at no more than 20%;
• set the VAT Flat rate at 5%;
• the criteria for operating the VAT Flat Rate Scheme should be based on taxable
supplies value and not whether goods or services are supplied or whether the
supplier is a retailer or not; and
• repeal the CHRL.
The above measures will “boost local productive capacity” and “promote and diversify
exports” which are two of the seven-point agenda on which the 2023 Budget is
anchored. Our suggestions are in line with Government’s Post-COVID-19 Programme for
Economic Growth (PC-PEG) and its desire to reduce the threshold on earmarked funds
from the 25% to 17.5% of Tax Revenues.
We recommend that suppliers and customers should plan to accommodate the expected
increase in the prices of goods and services. Suppliers may need to decide whether to
absorb the cost or transfer it to customers depending on the nature of the goods.
Review of VAT The VAT threshold for registrable persons is to be reviewed and major reforms
registration threshold undertaken with respect to VAT exemptions.
and VAT exemptions
Currently, a person is required to register for VAT if that person makes taxable supplies
exceeding GH¢200,000 within a 12 month period or its quarterly equivalent. This
monetary threshold has been in effect since 2016. Government has not indicated what
the new threshold will be. However, an upward adjustment is expected to account
for factors such as inflation, cost of doing business, etc. It remains to be seen if the
Government will seek to continue with its approach of maintaining a common minimum
threshold for both standard and flat VAT Schemes or adopt varied minimum taxable
supply requirements. It also remains to be seen whether the upper limit for the VAT Flat
Rate Scheme, which is currently at GH¢500,000, will be adjusted accordingly.
Considering the desire of Government to use levies and deny deductions, we

recommend that the taxable supplies range for operating VFRS should be between
GH¢0.48 million and GH¢1.2 million. A supplier that makes taxable supplies in excess
of GH¢1.2million should be able to seek support to account for VAT as a standard rate
supplier. We wish to remind the Government to also review upwards the monetary
registration trigger for promoters of public entertainment.
Regarding review of VAT exemptions, we recommend that Government makes the law
more certain, such as specifying the petroleum list which is yet to be done almost nine
years after the law was introduced.

Reduction of The Government proposes to reduce the rate of E-Levy by 0.5% and eliminate the daily tax-
Electronic Transfer exempt threshold as a first measure to others.
Levy (“E-Levy”)
rate from 1.5% to
1% and removal of The E-levy has been a controversial issue for stakeholders since its introduction
daily non-taxable through to its eventual passage by Parliament in March 2022 at a rate of 1.5%. It was
threshold anticipated that the levy would widen the tax net as well as contribute significantly to
the Government’s developmental agenda. However, the projected performance of less
than 10% (at GH¢0.59 billion) of the initial revenue target of GH¢6.9 billion suggested a
second look at the levy. It is therefore not surprising that Government has heeded to the
calls by stakeholders and has proposed to reduce the rate to 1%.
The Minister of Finance has also indicated that extensive consultation with stakeholders
is ongoing and should result in further review of other aspects of the levy. Taxpayers
should expect some amendment to the various exemptions granted by the E-Levy Act.
This would likely make up for some of the anticipated shortfall that may result from the
0.5% reduction.
Government needs to address questions regarding the protection or reliefs available

to cushion the poor if the daily threshold on transfers is removed. Similarly, would the
Government remove the daily interbank threshold of GH¢20,000? Are the E-Levy and the
removal of the limits not adversely affecting the Government’s digitalisation agenda?
We recommend that the daily threshold should not be removed or reduced to encourage
electronic transactions and the growth of the industry which would result in increased
revenue for Government. Reducing or removing the daily threshold could reduce trust for
reasons assigned to the design of tax policies by the Government.
Withdrawal of The benchmark value discount policy will be phased out in 2023.
benchmark discount
policy on imported
goods in 2023 In March 2022, the benchmark value discount policy originally introduced by the
Economic Management Team (“EMT”) in 2019 was reviewed. The review resulted in the
GRA applying reduced discounts of 30% and 10% on the customs values of selected
imported general goods and imported vehicles respectively.
This proposal seeks to entirely reverse the benchmark value discount policy. It is
expected that this would positively impact revenue mobilisation efforts at the various
ports of entry. The policy withdrawal clearly signifies the Government’s intent to renew
its focus on import-substitution and the export orientation agenda. It is expected that the
policy roll-back would discourage importation and consequently ease the pressure on
the Ghana Cedi and the international trade deficit situation. Additionally, local industries
with the capacity to meet demand now have an even playing field to compete and thrive.
Although no timeline was provided in the Budget for phasing out of the benchmark
discount policy, it is expected that the EMT will expressly or impliedly issue a directive
sometime in the coming weeks to that effect.
We hope that our Custom authorities will begin to place more reliance on the use of
transaction value in determining custom duties and taxes rather than the over-reliance
of reference or benchmark value which may not be in line with the customs valuation
approach.
It is imperative that the Government explores avenues to cushion ordinary consumers in

the face of imminent price hikes of imported goods. The withdrawal of foreign exchange
support by the Bank of Ghana for importation of specific items e.g. poultry, rice etc will
further worsen the plight of consumers.

Approval and Government intends to adopt and implement the 2022 version of the ECOWAS Common
implementation of External Tariff (“CET”).
the 2022 ECOWAS
CET
Every five years, the Harmonised Commodity Description and Coding System (“HS”)
is updated globally, and in line with it, countries or regional trading blocs update the
classification of products that pass through their borders. The update may require
updates to tariffs (taxes) in the HS or tariff schedules.
However, Cabinet and Parliament are yet to approve the 2022 version of the ECOWAS
CET to allow GRA to implement and configure tax systems to recognise any changes in
the updated framework.
We expect the new CET to contain some additional tariff lines, headings as well
as amendment of rates where necessary. We advise importers to engage with tax
consultants to check the likely impact of the 2022 version on their businesses.
Introduction of Self- The Government proposes to allow importers to self-clear goods at the ports without recourse
clearance system at to Customs House Agent.
the ports
Presently, the clearance of goods at the ports typically requires the services of a
Customs House Agent (“CHA”). Only a few taxpayers have the dispensation to clear their
imports themselves.
The idea of using CHAs has been occasioned by the fact that relatively few people
understand customs and port processes and procedures and the need for easy tracking
of those who clear items from our ports. However, in recent times, some CHAs have
engaged in fraudulent activities in clearing goods at the port. This may have informed the
Government’s decision to allow importers to clear goods by themselves and minimise
the perceived opacity and complexity that has characterised port operations.
The measure is also coming at a time when the Government has invested significantly in
port technology to make self-clearance possible and easy.
It is expected that persons who will be authorised to self-clear their imports will be
required to meet certain minimum qualifications such as having a valid tax clearance
certificate for commercial imports. In addition, those who self-clear should be traceable
by the use of the Ghana Card for individuals and business registration documents for
entities.

Increase of excise Government intends to increase the excise duty rate on spirits and harmonise the excise
duty rate for spirits taxes on tobacco products to align with ECOWAS protocols.
and revision of
excise on tobacco
products Government intends to increase excise duty on spirits which currently ranges from 10%
to 25% of ex-factory price or customs value. We expect that the new ad-valorem rate
for spirits would be increased to at least 47.5% so as not to be lower than the maximum
excise duty rate for beer. We also anticipate that the spirits used solely in laboratories or
in compounding drugs would remain zero-rated for excise duty.
Government also intends to align the imposition of excise duty on tobacco products with
ECOWAS protocols. ECOWAS directive C/DIR.1.12.17 on the harmonisation of excise
duties on cigarette and tobacco products in Member States commenced implementation
in January 2018. The intent of the directive is to ensure that across the ECOWAS sub-
region, both ad-valorem duty and specific duty are applied on tobacco products. Per the
directive, the ad-valorem duty must be at least 50% of ex factory price or at least the
customs value, while the specific duty must be at least US$0.02 per stick (for cigarettes,
cigars and cigarillos) or at least US$20 per net kilogram for all other tobacco products.
Ghana currently imposes only ad-valorem excise duties on tobacco products with rates
of up to 175% of ex-factory price on various categories of tobacco products. We do not
expect any upward revision to these rates. However, it is anticipated that specific excise
duty would be introduced in January 2023 in addition to the ad-valorem duty which
currently applies to tobacco products.
We commend Government for taking steps to comply with the ECOWAS Directive on the
Harmonisation of Excise Duties on Tobacco Products in ECOWAS Member States.
Excise duty on The Government intends to impose excise duties on electronic smoking devices and liquid,
electronic smoking which until now, is not part of the items on which excise duties applied.
devices and liquids
The proposed measure to levy excise duties on electronic smoking devices and liquids
by Government seems necessitated in part by the need to regulate the consumption
of these products. This measure, if implemented properly, would generate additional
revenue and reasonably limit access to these products due to the likely increase in prices
due to the tax.

Tax Administration and Other Revenue Measures
The provisional performance for tax revenue for the first nine months was GH¢49.1 billion
compared to a programmed amount of GH¢50.4 billion. This 2.6% adverse performance variance
accounts for part of the 2.9% shortfall in domestic revenues for the first nine months of the year.
Government expects that by the close of 2022, tax revenues will be GH¢75.3 billion against a
(mid-year revised) budgeted amount of GH¢74.4 billion. This means that by the end of the year,
tax revenues are expected to have a favourable variance of GH¢0.9 billion amounting to about
1.0% of the revised budget for 2022.
The 2023 Budget provides some key

administrative measures to be implemented
by Government to boost revenue generation,
improve efficiency and reduce revenue
leakages in the administration of taxes. The
administrative measures proposed in the
2023 Budget are to help the Government
meet its tax revenue target of GH¢112.4
billion, representing an ambitious 49.27%
growth over the projected outturn for 2022.
The tax administration and other revenue measures proposed in the 2023 Budget include:
Freeze on new tax Government intends to put a freeze on new tax waivers for foreign companies
waivers for foreign
companies
This measure complies with the Exemptions Act, 2022 (Act 1083) which entered into
force in September 2022. Government is signalling to foreign investors that they should
not expect any exemption on customs duties and taxes on any item imported, and other
domestic taxes not provided in the tax laws.
This measure may adversely affect the Ghana Investment Promotion Centre’s efforts
at attracting foreign investors with special tax incentives. Also, the objective to create
Industrial Parks and Special Economic Zones under the Ghana Economic Transformation
Project (GETP) by the first quarter of 2023 should be carefully considered in light of the
freeze on new tax waivers.
Foreign companies seeking to do business in Ghana should take note of this

pronouncement and ensure their plans are prepared on the basis that no special tax
concession will be available as long as the freeze remains in force.

Review of tax Government intends to review tax exemptions for free zones, mining, and oil and
exemptions for free gas companies.
zones and extractive
industries
Free Zone Enterprises enjoy several tax concessions including tax exemptions on items
imported into the free zone area, 10-year income tax holiday and 15% company income
tax on exports. Government may be considering reducing the income tax holiday period,
and/or increasing the income tax rate on exports. Government should also consider
the potential repercussions of varying the tax incentives of free zone entities to their
disadvantage.
Ghana’s extractive sector is largely made up of the mining and oil and gas sectors. The
main participants in these industries have agreements with Government that contain
some tax exemptions and stability clauses. In reviewing the exemptions, Government
needs to be cautious in order not to trigger avoidable litigations and arbitrations as
several of these agreements have stability clauses that protect the entities. If the
indication is for future agreements, Government will need to be in a stronger negotiating
position to achieve reduced exemptions.
Government should also consider the impact of tax incentives in attracting investments
into Ghana. If Government demonstrates that it can, at any time, arbitrarily depart from
legislated and negotiated tax agreements without broad consultation, investors would no
longer be attracted by these incentives in future negotiations.
Electronic VAT Government has launched the first phase of the electronic VAT invoicing system (e-VAT) and
invoicing to cover expects to cover all VAT registered businesses by 2024.
all VAT registered
businesses by 2024
Government announced the introduction of e-VAT in the 2022 Mid-Year Budget
Review. The purpose of e-VAT is to enable GRA to have a real-time view of VAT-related
transactions for the collection of the tax and to make electronic invoicing (e-invoicing)
the sole medium for issuing VAT invoices.
After piloting the measure with selected taxpayers Government on 1 October 2022
officially launched the first phase of the measure to cover large companies who account
for a significant percentage of VAT collections. Government is now focused on extending
the measure to all taxable suppliers by 2024.
We commend the digitalisation of our tax processes and the progress made so far in
implementing this measure in phases. We are, however, of the view that the successes
achieved so far are as a result of the nature of the companies (i.e., their ability to speedily
implement changes due to their size and complexity) that were piloted, and that if well-
thought out safeguards are not considered the extension of this measure to all taxpayers
may not achieve the expected outcomes.
We recommend that for the next phase of implementation, Government considers

the size and complexities of taxpayers and their ability to install the necessary IT
infrastructure that would enable improved compliance. We also recommend that the
Government should actively engage the taxpayers in the next phase through educational
campaigns and consultations for their views and grievances to be taken on board and
considered for the implementation of the measure.

Expanding Government to expand the requirement for the Tax Clearance Certificate (“TCC”) to cover
transactions for additional transactions and ultimately improve tax compliance.
which TCC is
required
Government as part of the National Digitisation Programme (“NDP”) has digitalised the
issuance of TCCs effective 1 October 2022. Taxpayers seeking the TCC are required to
apply online through the GRA Taxpayers Portal (which is also accessible on the Ghana
Taxpayers App). This measure should encourage taxpayers to fulfil their tax obligations
including paying taxes on time. With this background, the Government intends to
increase the scope of activities for which a TCC may be required. Broadly those activities
include dealing with the Customs Authorities, applying for a licence for excise purposes,
title registrations, entering into Government contracts and renewal of practising licence.
The introduction of an electronic TCC and expanding the scope of activities for which
TCCs may be require is a laudable measure as it reduces the costs, time and efforts
involved in applying and receiving TCCs. It may also improve tax compliance and
increase Government revenues.
We will recommend that the GRA intensifying educational campaigns on this measure
especially on the processes involved and any additional requirements with the digitalised
approach.
Some key tax measures
Direct tax measures Indirect tax measures

• Introduction of a 35% marginal income • Increase in the standard Value Added Tax
tax rate for individuals and revision of (“VAT”) rate from 12.5% to 15%.
the upper limits for vehicle benefits. • Review of VAT registration threshold and VAT
• Modification of the regime for taxing exemptions.
capital gain. • Reduction in the Electronic Transfer Levy
• Increase in the temporary concessionary (“E-Levy”) rate from 1.5% to 1% of transaction
tax rate from 1% to 5%. value and removal of daily non-taxable
• Introduction of a minimum chargeable threshold.
income system. • Imposition of excise duty on electronic
• Unification of the provisions on carry smoking devices and liquids.
forward of tax losses. • Withdrawal of benchmark discount policy on
• Restriction of foreign exchange imported goods in 2023.
loss deduction to actual losses and • Approval and implementation of the 2022
capitalisation of realised exchange loss ECOWAS Common External Tariff (“CET”).
on capital assets. • Introduction of a self-clearance system for
• Conversion of the National Fiscal imports of goods at the ports.
Stabilisation Levy (“NFSL”) to Growth • Increase of excise duty rate for spirits,
and Sustainability Levy (“GSL”) to cover cigarettes and tobacco products.
all entities.
• Pursuance of Additional Oil Entitlement
(“AOE”) from the Jubilee Field.
• Introduction of a tax on Gross Gaming
Revenue to replace corporate income General administrative and other revenue measures
tax and VAT. In addition a token • Freeze on new tax waivers for foreign companies.
withholding tax on winnings from games • Review of tax exemptions for free zones and
of chance will be introduced. extractive industries.
• Waiver of tax on early withdrawals from • Electronic VAT invoicing to cover all VAT
Tier 3 Provident Funds and personal registered businesses by 2024.
pension schemes for eligible persons. • Expanding transactions for which
• Revision of vehicle income tax and Tax Clearance Certificate (“TCC”) is required.
income tax stamps.

5 Appendix

Appendix 1
Summary of Central Government Revenue 2022-2023
Government Revenue Millions of Ghana 2022 Revised 2022 Proj. 2023 Budget Variance Variance Variance
Cedis Budget (A) Outturn (B) (C) (E=C-A) (F=B-A) (G=C-B)
Tax Revenue 74,425.75 75,264.89 112,357.89 37,932.14 839.14 37,093.00
Taxes on Income and Property 38,976.21 39,594.10 59,813.22 20,837.01 617.89 20,219.12
PAYE 11,814.22 11,571.22 15,680.27 3,866.05 -243.00 4,109.05
Self Employed 934.76 662.94 856.09 -78.67 -271.82 193.15
Companies 16,477.19 16,906.07 23,947.40 7,470.21 428.88 7,041.33
Company Taxes on Oil 3,144.85 3,743.37 8,589.68 5,444.83 598.52 4,846.31
Others 6,605.19 6,710.50 10,739.78 4,134.59 105.31 4,029.28
Other Direct Taxes 5,307.12 5,209.39 7,268.37 1,961.25 -97.73 2,058.98
o/w Royalties from Oil 2,484.22 2,604.93 4,129.42 1,645.20 120.71 1,524.49
o/w Mineral Royalties 2,574.05 2,134.52 2,547.10 -26.95 -439.53 412.58
National Fiscal Stabilisation Levy 613.10 599.79 2,216.39 1,603.29 -13.31 1,616.60
Finsec clean-up Levy 288.94 365.15 377.23 88.29 76.21 12.08
Airport Tax 396.03 536.17 877.79 481.76 140.14 341.62
Taxes on Domestic Goods and Services 30,028.34 30,130.22 44,888.80 14,860.46 101.88 14,758.58
Excises 6,177.43 5,447.46 6,333.93 156.50 -729.97 886.47
Excise Duty 670.88 566.31 1,186.56 515.68 -104.57 620.25
Petroleum Tax 5,506.55 4,881.15 5,147.37 -359.18 -625.40 266.22
o/w Energy Fund Levy 50.09 44.56 59.81 9.72 -5.53 15.25
o/w Road Fund Levy 2,454.25 2,130.99 2,496.28 42.03 -323.26 365.29
VAT 15,402.92 14,920.48 23,715.01 8,312.09 -482.44 8,794.53
Domestic 8,950.15 8,257.63 15,611.81 6,661.66 -692.52 7,354.18
External 6,452.77 6,662.85 8,103.20 1,650.43 210.08 1,440.35
National Health Insurance Levy (NHIL) 3,040.76 3,285.01 4,644.36 1,603.60 244.25 1,359.35
Customs Collection 1,144.45 1,177.88 1,498.39 353.94 33.43 320.51
Domestic Collection 1,896.31 2,107.13 3,145.97 1,249.66 210.82 1,038.84
GETFund Levy 3,094.32 3,718.86 4,644.36 1,550.04 624.54 925.50
Customs Collection 1,146.36 1,348.08 1,498.39 352.03 201.72 150.31
Domestic Collection 1,947.96 2,370.78 3,145.97 1,198.01 422.82 775.19
Communication Service Tax 580.95 632.22 782.29 201.34 51.27 150.07
E-Transaction Levy 611.00 594.09 2,235.11 1,624.11 -16.91 1,641.02
Covid-19 Health Levy 1,120.96 1,532.10 2,533.74 1,412.78 411.14 1,001.64
Taxes on International Trade 8,573.28 9,397.57 14,015.79 5,442.51 824.29 4,618.22

Imports 8,573.28 9,397.57 14,015.79 5,442.51 824.29 4,618.22
Import Duty 8,573.28 9,397.57 14,015.79 5,442.51 824.29 4,618.22
Tax Refund -3,152.08 -3,857.00 -6,359.92 -3,207.84 -704.92 -2,502.92
Social Contributions 511.23 407.81 630.72 119.49 -103.42 222.91

SSNIT Contributions to NHIL 511.23 407.81 630.72 119.49 -103.42 222.91
Non-Tax Revenue 15,960.74 15,163.18 23,043.67 7,082.93 -797.56 7,880.49

Retention 8,318.61 7,275.68 10,627.62 2,309.01 -1,042.93 3,351.94
Lodgement 7,642.13 7,887.50 12,416.05 4,773.92 245.37 4,528.55
Fees & Charges 653.00 731.64 941.89 288.89 78.64 210.25
Dividend/Interest & Profits (Others) 298.00 380.84 403.69 105.69 82.84 22.85
Dividend/Interest & Profits from Oil 6,452.00 6,595.51 10,719.65 4,267.65 143.51 4,124.14
Surface Rentals from Oil/PHF Interest 7.35 13.95 15.83 8.48 6.60 1.88
Property Rate Collection 39.40 0.00 165.44 126.04 -39.40 165.44
Yield from Capping Policy 192.96 165.56 169.55 -23.41 -27.40 3.99
Other Revenue 4,756.04 5,740.68 5,520.43 764.39 984.64 -220.25

ESLA Proceeds 3,925.94 4,380.56 3,889.47 -36.47 454.62 -491.09
Energy Debt Recovery Levy 2,739.05 2,739.05 2,658.84 -80.21 0.00 -80.21
Public Lighting Levy 222.50 142.50 257.01 34.51 -80.00 114.51
National Electrification Scheme Levy 148.19 99.28 171.46 23.27 -48.91 72.18
Price Stabilisation & Recovery Levy 816.20 1,399.73 802.16 -14.04 583.53 -597.57
Delta Fund 565.70 924.88 1,108.71 543.01 359.18 183.83
Pollution and Sanitation Levy 264.40 435.24 522.25 257.85 170.84 87.01
Domestic Revenue 95,653.76 96,576.56 141,552.71 45,898.95 922.80 44,976.15
Grants 1,188.38 1,503.81 2,403.73 1,215.35 315.43 899.92

Project Grants 1,188.38 1,503.81 2,403.73 1,215.35 315.43 899.92
Total Revenue and Grants 96,842.14 98,080.37 143,956.44 47,114.30 1,238.23 45,876.07

Appendix 2
Summary of Central Government Expenditure 2022-2023
2022 Revised 2022 Proj. 2023 Budget Variance Variance Variance

EXPENDITURE
Budget (A) Outturn (B) (C) (E=C-A) (F=B-A) (G=C-B)
Compensation of Employees 37,948.99 38,475.72 44,990.03 7,041.04 526.73 6,514.31

Wages and Salaries 32,955.76 33,547.25 38,730.78 5,775.02 591.49 5,183.53
Social Contributions 4,993.23 4,928.47 6,259.25 1,266.02 -64.76 1,330.78
Pensions 1,483.55 1,418.39 1,859.70 376.15 -65.16 441.31
Gratuities 356.65 269.94 447.08 90.43 -86.71 177.14
Social Security 3,153.03 3,240.15 3,952.47 799.44 87.12 712.32
Use of Goods and Services 5,866.62 5,880.11 8,048.00 2,181.38 13.49 2,167.89
o/w ABFA 1,865.83 1,989.80 3,701.68 1,835.85 123.97 1,711.88
o/w Non-ABFA 4,000.78 3,890.31 4,346.32 345.54 -110.47 456.01
Interest Payments 41,361.59 44,011.69 52,550.37 11,188.78 2,650.10 8,538.68

Domestic 31,345.64 32,511.69 31,297.84 -47.80 1,166.05 -1,213.85
External (Due) 10,015.95 11,500.00 21,252.53 11,236.58 1,484.05 9,752.53
Subsidies 326.48 326.48 350.55 24.07 0.00 24.07

Subsidies on Petroleum Products 326.48 326.48 350.55 24.07 0.00 24.07
Grants to Other Government Units 23,683.88 23,994.04 30,078.76 6,394.88 310.16 6,084.72
National Health Fund (NHF) 1,868.47 1,888.28 2,500.28 631.81 19.81 612.00
Education trust Fund 1,788.20 1,808.36 1,869.56 81.36 20.16 61.20
Road Fund 1,418.31 1,434.30 1,004.86 -413.45 15.99 -429.44
Petroleum Related Funds 28.95 29.27 24.08 -4.87 0.32 -5.19
Dist. Ass. Common Fund 3,036.95 3,066.58 4,554.03 1,517.08 29.63 1,487.45
o/w ABFA 310.97 341.41 616.95 305.98 30.44 275.54
Ghana Infrastructure Fund (ABFA Capex) 870.72 955.94 1,727.45 856.73 85.22 771.51
Retention of Internally Generated Funds (IGFs 8,318.61 7,275.68 10,627.62 2,309.01 -1,042.93 3,351.94
Transfer to GNPC from Oil revenue 1,851.16 2,857.41 2,345.83 494.67 1,006.25 -511.58
Other Earmarked Funds 4,502.51 4,678.22 5,425.05 922.54 175.71 746.83
Youth Employment Agency 317.63 330.15 345.40 27.77 12.52 15.25
Student's Loan Trust 3.36 3.40 3.15 -0.21 0.04 -0.25
Export Development Levy 230.58 233.18 181.80 -48.78 2.60 -51.38
Ghana Airport Authority 396.03 536.17 877.80 481.77 140.14 341.63
Mineral Development Fund 297.51 300.86 205.06 -92.45 3.35 -95.80
Mineral Income Investment Fund 1,190.03 1,203.45 820.26 -369.77 13.42 -383.19
GRA Retention 2,063.90 2,067.50 2,989.16 925.26 3.60 921.66
Plastic Waste Recycling Fund 3.47 3.51 2.42 -1.05 0.04 -1.09
Social Benefits 169.69 169.69 545.07 375.38 0.00 375.38

Lifeline Consumers of Electricity 169.69 169.69 150.00 -19.69 0.00 -19.69
Transfers for Social Protection 0.00 0.00 395.07 395.07 0.00 395.07
Other Expenditure 10,784.99 8,338.52 26,739.91 15,954.92 -2,446.47 18,401.39

ESLA Transfers 4,429.55 4,216.02 3,087.31 -1,342.24 -213.53 -1,128.71
Energy Sector Payment Shortfalls 6,355.44 4,122.50 23,652.60 17,297.16 -2,232.94 19,530.10
Capital expenditure 13,700.23 15,724.93 27,693.87 13,993.64 2,024.70 11,968.94

Domestic Financed 4,207.11 4,207.11 11,685.31 7,478.20 0.00 7,478.20
o/w ABFA 1,035.19 915.03 5,392.45 4,357.26 -120.16 4,477.42
o/w MDAs CAPEX ABFA 3,171.92 3,292.08 6,292.86 3,120.94 120.16 3,000.78
Foreign financed 9,493.12 11,517.82 16,008.56 6,515.44 2,024.70 4,490.74
TOTAL EXPENDITURE 133,842.47 136,921.18 190,996.56 57,154.09 3,078.71 54,075.38
APPROPRIATION 145,472.35 153,944.41 227,805.33 82,333.00 8,472.06 73,860.92

Total Expenditure 133,842.47 130,175.26 190,996.54 57,154.09 -3,667.21 60,821.28
Arrears (net change) 1,900.00 12,434.68 14,435.33 12,535.33 10,534.68 2,000.65
Amortisation 9,729.88 11,334.47 22,373.46 12,643.58 1,604.59 11,038.99

6. Research and Insights from PwC
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industry development in anticipated Mid-year Fiscal Policy Review of the
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Government of Ghana for 2022 (“the Budget”) to
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Parliament.
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There have been several impactful events

over the years which have shifted or shaped
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PwC 2023 Budget Digest

Restoring and Sustaining Macroeconomic Stability and Resilience

6 Research and Insights from PwC

12.6% 28.5% 37.2% 18.9% 8%+2

11.3% 6.6% 7.4% 7.7% 6.3%

*As at June 2022

Real GDP Growth per Sector

2021 EoY Q2, 2022 2022 EoY Projected 2023 Forecast

EoY = End of year

Q3, 2022 Q3, 2022 Q3, 2022

USD/GH¢ EUR/GH¢ GBP/GH¢

Source: Bank of Ghana Monthly Exchange Rate

1 PwC 2023 Budget Digest Report

GH¢44.90 billion GH¢14.02 billion (GH¢6.36 billion)

GH¢23.04 billion Others

Use of Goods and Services Subsidies

Interest Payments GH¢191.00 billion

Grants to other Government Units Other Expenditure

2 PwC 2023 Budget Digest Report

External Debt Domestic Debt with Bailout Debt to GDP Ratio

Government’s 7-point Agenda

Key Tax Measures

3 PwC 2023 Budget Digest Report

4 PwC 2023 Budget Digest Report

5 PwC 2023 Budget Digest Report

While the increase in VAT will certainly affect all

The 2023 Budget Statement signals a number

6 PwC 2023 Budget Digest Report

7 PwC 2023 Budget Digest Report

Public Financial Management 16

8 PwC 2023 Budget Digest Report

Figure 1: GDP Growth in the Manufacturing Sector

*Projected GDP growth for 2022 Source: 2023 Budget Statement

9 PwC 2023 Budget Digest Report

Implementation of Establishment of Introduction of three Establishment of a

Establishment of a Development of Facilitation of the Withdrawal of Completion of the

Government’s commitment to making Ghana of measures to strengthen company internal

The pursuit of strategies such as the

10 PwC 2023 Budget Digest Report

11 PwC 2023 Budget Digest Report

Development Bank of Ghana Other Commercial Banks and

FX Reforms Focus on Agriculture Financing Boosting Agribusiness

Private Sector Focus Funding

12 PwC 2023 Budget Digest Report

13 PwC 2023 Budget Digest Report

The projected increase in the membership of

14 PwC 2023 Budget Digest Report

National Home Ownership and Investment Scheme

15 PwC 2023 Budget Digest Report

Given the macroeconomic pressures as a

16 PwC 2023 Budget Digest Report

There is a critical need to extend both

In line with PFM regulations and to

GIFMIS remains the core financial

17 PwC 2023 Budget Digest Report

While these measures may lead to

18 PwC 2023 Budget Digest Report

As we commend the Government for this

All Covered Entities are enjoined under the

19 PwC 2023 Budget Digest Report

Government continues to show

The spending constraint presents the