3% VAT will simplify tax system

Finance Minister Ken Ofori Atta has pledged that government would work with stakeholders in the economy for a clearer understanding on how the VAT Flat Rate Scheme functions.

According to him, the rationale behind the policy is geared towards simplifying the tax system and does not impose double or cascading tax.

The implementation of the scheme has been met with concerns from business associations including the Association of Ghana Industries (AGI).

Speaking to the media after honoring the invitation of the Finance Committee in Parliament on Thursday, “We don’t think there is any illegality but since the honorable Member of Parliament, ranking has said it we will look at it again.

That notwithstanding, we are very sure that there is no illegality in the scheme.” Finance Minister Ken Ofori Atta argued.

Meanwhile, the Ghana Union of Traders Association (GUTA) and Electrical dealers Association have wholly backed the scheme.

However, President of GUTA, Nana Dr.  Ofori Ameyaw I has warned traders to desist from deliberately fluctuating market prices due to the development, adding that culprits will be dealt with severely.

“So if you have parity in the system where everybody is paying, we don’t anticipate or see any sort of price increases.

In any case, if people decide to increase their prices deliberately, we are in a competitive market, we are not in a monopolistic market.

Once you do that the market forces will bring you out because you cannot decide on prices.

It is market forces that determine prices of goods on the market”, he said.

“So those who are thinking that deliberately they are going to increase prices because government is trying to bring this 3% on them, the market forces will actually slash them up from the market”, he warned.