…Over ‘ma trick mu’ tax policy
The Minority caucus in Parliament has berated the government over what it described as “ma trick mu” policies with the controversial 3% VAT rate that has received displeasure from players in the manufacturing industry.
According to the Minority, the 3% VAT charge that government slapped on Ghanaian manufacturers and wholesale companies amounts to double taxation and that the NDC government will reverse it when it comes to power in 2021.
Hon. Cassiel Ato Forson, Ranking Member of Finance in Parliament and former Deputy Finance Minister, stated this at a press briefing soon after the Minister of Finance, Ken Ofori-Atta had met the parliament’s Finance Committee and stakeholders in parliament yesterday.
He said it was surprising that the government, which promised better environment for business and was also vehemently criticised the NDC government a few months ago could engage in introducing fresh taxes.
Describing it as a ‘419’ or a fraudulent taxation regime, Casiel Ato Forson said government must listen to the concerns of manufacturers and importers and withdraw the tax.
“All of a sudden, the VAT burden instead of it being reduced has become an increase. This is because the value added flat rate only relates to retailers. For some reason, the government decided to include wholesalers. If you are to extend to wholesalers it is an imposition of an additional tax,” he contended.
The Minority Ranking Member further stated that, “what they are doing is a 419 way of imposing taxes on the ordinary Ghana. They tricked Ghanaians into introducing additional tax.”
The 3% VAT rate is an amendment of Value Added Tax Act, 2013 (Act 870)
Mr. Isaac Adongo, a Minority member of the Finance Committee of Parliament, on his part, argued that, the government explanation that it would not have effect on prices of goods and services is misleading.
He said, what it meant was that manufacturers, distributors, wholesalers and retailers would charge double tax and pass same to the last consumer, hence the 3% VAT thereby could trigger price hikes in the market.
The amendment gives legal backing to a new VAT Flat Rate Scheme (VFRS) that would facilitate collection of VAT & National Health Insurance Levy (NHIL) on the supply of goods by wholesalers and retailers.
It also classifies the supply of financial services, domestic air transportation and sale of immovable property by real estate developers as exempt supplies.
The implementation of the tax policy has triggered some deep- seated controversy between government and the Association of Ghana Industries (AGI), which has been on the forefront, challenging the implementation of the new VAT law.
The AGI is of the view that, the implementation of the new tax law would lead to the an increase of prices of goods and services,
They claimed that, apart from it being inimical to business growth, it could also cause the collapse of many industries, especially those that import.
But the Finance Minister and officials of the Ghana Revenue Authority (GRA), at the meeting in parliament, disputed the Minority and the AGI stance.
Ken Ofori-Atta stated that, though the new tax regime could have some cascading effects, government would take a serious look at the concerns to be able to have a smooth implementation.
He added that there would be series of engagement with all stakeholders to ensure the policy is implemented without much agitation from retailers and consumers.
The Ghana Union of Traders Association (GUTA) is for the 3% VAT flat rate, claiming that it would boost their business.
Source: therepublicnewsonline.com/ Felix Engsalige Nyaaba