As parliament prepares for its second session, here is a list of key bills that we expect to be debated and enacted into law this session.
Electronic Transfer Levy Bill, 2021
Digital transactions were generally outside the scope of the tax net in Ghana, despite an exponential increase in usage over recent years, which has only accelerated during the COVID-19 pandemic. According to the Bank of Ghana, the value of digital transactions in Ghana grew by 120% from February 2020 to February 2021, a threefold increase relative to the 40% increase from February 2019 to February 2020. The total value of digital transactions for 2020 was estimated to be over GH¢500 billion compared to GH¢257 billion in 2019 and GH¢78 billion in 2016. As of October 2021, there were 18.4 million active mobile money accounts, more than 7 times the number of registered taxpayers.
The Electronic Transaction Levy (“E-Levy”) is the Government's route to “rope in” the informal sector to widen the tax net and it is projected that the E-Levy could raise approximately GH¢ 6.9 billion in 2022. Up to 16.7% of this projected revenue is earmarked for road infrastructure development and up to 10% for improvements in public transportation.
The E-Levy is a tax on mobile money payments, bank transfers, merchant payments, and inward remittances. The originator of the transaction, i.e., the sender will bear the charge except for inward remittances which will be borne by the recipient. Transactions that add up to GH₵100 or less per day (GH₵3000, approximately US$475, per month) will be exempted.
The levy was initially set at a rate of 1.75% during the reading of the 2022 Budget and was expected to come into force on 1 February 2022. However, parliament, after sitting to consider the approval or otherwise of the E-Levy Bill could not reach a decision on the approval of the levy. And with investors questioning whether Ghana can sustain its debt levels if a surge in borrowing costs shuts it out of international markets, the passage of the levy will be crucial in assuaging investor concerns on the political capital of the Government to pass revenue-raising measures into law. A decision on the E-Levy bill is likely to be reached when parliament resumes in January 2022.
Ghana Standards Authority Bill, 2021
The Ghana Standards Authority Bill, 2021 seeks to repeal the decades-old Standards Authority Act 1973 (NRCD 173) and modernise the operations of the Ghana Standards Authority (GSA). In line with commitments under the African Continental Free Trade Area (AfCFTA) which require the maintenance and enforcement of strict standards, the Bill will empower the GSA to impose stricter penalties for importers of inferior products and destroy seized goods that are of inferior standards. It is expected that this will protect the Ghanaian market from unfair trade practices in the AfCFTA programme by creating a robust quality control system.
The Ghana Standards Authority Bill also seeks to eliminate redundancies caused by the duplication of roles encountered with other regulators such as the Food and Drugs Authority. The Bill was laid before Parliament on 12 November 2021 and is yet to go into the committee stage for deliberation. We expect the Ghana Standards Authority Bill to be passed into law in 2022.
Exemptions Bill, 2021
The Exemptions Bill seeks to streamline the existing exemptions regime in Ghana by varying, and where necessary, consolidating existing statutory provisions on exemptions and providing for the administration of exemptions in Ghana. The Bill notably, grants exemptions to diplomats on a reciprocal basis and further grants exemptions from direct and indirect customs duties and customs taxes to free zone developers, subcontractors or enterprises that import items into free zones or single factory zones.
The Exemptions Bill also allows the State to, in addition to granting a general tax incentive to a business in accordance with an enactment, grant a private investor a specially negotiated tax exemption for investment where the State takes a commensurate equity stake in the investment project. Programmes or projects fully funded by grants may be also granted exemptions required in the agreements governing the programmes or projects, subject to Cabinet and Parliamentary approval.
It is anticipated that these exemptions will encourage more foreign direct investments into the Ghanaian economy. The Exemptions Bill was first laid before parliament in 2019 but was not passed before the tenure of the 7th Parliament elapsed on 7 January 2021. It was re-laid before the 8th Parliament on 16 November 2021. We expect the bill to be passed into law in 2022.
Ghana Hydrological Authority Bill, 2021
The Ghana Hydrological Authority Bill seeks to establish the Ghana Hydrological Authority which will be responsible for helping to prevent flooding in Ghana. The Authority will be tasked to ensure that flood risk assessments are undertaken for all major infrastructural developments. The establishment of the Authority will help guarantee the safety of investments into infrastructural developments in Ghana by enhancing community safety and resilience.
Fees and Charges (Miscellaneous Provisions) Bill, 2021.
The Fees and Charges (Miscellaneous Provisions) Bill seeks to pass into law, some of the government’s key revenue generation policies outlined in the 2022 Budget Statement such as the policy decision to zero-rate tolls on all public roads and bridges to help reduce congestion on tolled roads, allow free flow of vehicles, and reduce travel time and the pollution caused by emissions from vehicles in and around tolling points.
In line with the Government’s revenue generation agenda, the Bill when passed into law, will also review all Government fees and charges with an average increase of at least 15% in 2022 and thereafter subject it to automatic annual adjustments by average inflation rate as published by the Ghana Statistical Service, but with the prior consent of the Minister for Finance.
National Pensions (Amendment) Bill, 2021
The National Pensions (Amendment) Bill seeks to amend the National Pensions Act 2008 (Act 766) to exclude the Police Serve, the Immigration Service, the Prisons Service, the Security and Intelligence Agencies and the Ghana National Fire Service from the unification of pensions. The amendment also seeks to exclude a representative of the Security Services who is not a member of the Ghana Armed Forces, from the governing body of the Social Security and National Insurance Trust (SSNIT). The representative is substituted with a representative of the Ministry responsible for pensions, not below the rank of a Director.