The Ghana Union of Traders Association (GUTA) has called for a total reform in the implementation of the Value Added Tax (VAT) to enhance compliance.
GATU’s call follows the implementation of the increase in the VAT rate from 12.5% to 15% effective January 1, 2023.
Finance Minister, Ken Ofori-Atta had indicated that the increase is expected to yield GH¢2.70 billion, which will be used to augment funding for road infrastructure development.
GUTA however warns that failure to reform the system may not yield the expected results.
In an interview with Citi News, the President of GUTA, Dr. Joseph Obeng said an increase in VAT will only worsen the plight of businesses and consumers in Ghana.
“It is another layer of doing business, and it is going to bring some discomfort to the business community and I think that the structure of the VAT system is not conducive and not fair. We were thinking that the VAT system itself should be looked at, and the necessary reforms made before even thinking about any further increment.”
“As it is now, compliance is going to be difficult. The tax system is going to be difficult. We have about three systems running concurrently. We have those who are being charged for the standard rates of about 21% and those who are made to pay the flat rate of 4% and yet another set of traders who are not captured on the VAT.”
Source: Citi Business News