Businesses increase prices as 3% VAT flat rate takes off
Consumers should be prepared to pay more on goods and services effective today as the 3 percent VAT flat rate is implemented.
Businesses are expected to input the rate into their pricing as the implementation commences.
Some business associations, last week met with the Vice President, Dr. Mahamudu Bawumia for the policy to be scrapped, but to no avail.
They argue that the tax creates a situation of inconvenience to businesses.
The Executive Secretary of the Importers and Exporters Association of Ghana, Sampson Asaaki Awingobit however tells Citi Business News they will go ahead with the price increases while they await the new directive from the Presidency.
He complained that the new system makes it difficult for importers since they have to first pay before they file for a refund.
“With the current law, what it states is that the importer can bring it, clear it at the port, pay with 17.5% VAT tax and when it is time for selling of goods that is cleared at the port, do invoice to them at 17.5% and come to government for reclaim but invoice to them at 3% meaning the difference of 14.5% is a cost to the importer,” he said.
“Is government expecting the importer to add it to the final consumer? If that’s the case that’s going to be a burden and I don’t think that is. And it is also not going to be business friendly because it is going to add up to the cost of operations,” he added.
Mr. Awingobit warned that there must a systematic way to address the issue to avert the situation from escalating.
“Mind you some of these our people are also paying utility bills and that can be a cascading effect on the final consumer. That is not what government is looking for,” he said.
By: Pius Amihere Eduku/Jessica Ayorkor Aryee/citibusinessnews.com/Ghana