3% VAT will make tax system simple – Ken Ofori Atta

The Minister of Finance Ken Ofori Atta has promised that government would work collaborate with stakeholders for everyone to have a better understanding of the VAT Flat Rate Scheme functions.

He was speaking after he appeared before the Finance Committee in Parliament on Thursday (July 6, 2017).

He said the policy is expected to make the tax system simple and does not impose double or cascading tax.

“We don’t think there is any illegality but since the honourable Member of Parliament, the ranking has said it we will look at it again. That notwithstanding, we are very sure that there is no illegality in the scheme.”

The Association of Ghana Industries (AGI) and other business organisations have raised concerns about the implementation of the new scheme.

However, the Ghana Union of Traders Association (GUTA) and Electrical Dealers Association have declared their support for the new scheme.

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But the President of GUTA, Nana Dr Ofori Ameyaw I has cautioned traders against deliberately increasing prices of goods due to the development.

“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 added that anybody found fluctuating their prices will be dealt with.

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