Ghana raises VAT from 12.5% to 15% 2014
The African state of Ghana has voted to increase the Value Added Tax rate from 12.5% to 15% from the 1 January 2014.
VAT rise needed for investment
The VAT rise will raise almost €300 million of tax revenues to help fund much-needed infrastructure investments. Ghana is too heavily reliant on deposits of gold, and needs to extend its revenue base. It has struggled to raise competitively priced debt on the world financial markets, so has had to raise the consumption tax rate instead. There are also a raft of spending cuts in the latest budget, and cuts to subsidies on power and gas.
The average VAT rate in Africa is 16%. The compares to the EU average VAT rate of over 21%.