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GREDA Fresh case made for gov't to review 5% VAT on housing units

The VAT was imposed by the Ghana Revenue Authority (GRA) in October 2015 amidst protestation from GREDA.

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The VAT was imposed by the Ghana Revenue Authority (GRA) in October 2015 amid protestation from GREDA. play

The VAT was imposed by the Ghana Revenue Authority (GRA) in October 2015 amid protestation from GREDA.

Some members of the Ghana Real Estate Developers Association (GREDA) are pushing for a review of the five percent Value Added Tax (VAT) imposed on all housing units sold.

The VAT was imposed by the Ghana Revenue Authority (GRA) in October 2015 amidst protestation from GREDA.

Almost one year since the tax was imposed, it appears to be having a boomerang effect on the ability of potential home owners access to mortgages.

The CEO of Sethi Reality, Mono Sethi said in an interview with Joy FM that the real estate market is down as a result of the VAT imposition.

He said: "The real estate market is down at the moment and now you have an extra five percent sale which makes it a bit more difficult [for people to own a home].

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"It makes a lot of people unhappy, everyone wants to own a home and you want to find the best deal possible and now you put five percent with this hardship in the economy.

"It put a lot of people at unease. we are all feeling the pinch."

Mr Sethi further noted that the timing of the 5% tax on housing units sold was not right, saying it is making it difficult for sales to be made.

Ghana has an estimated housing deficit of more than 1.8 million units.

In 2015, when the tax was imposed, the Executive Secretary of GREDA, Samuel Amegayibor, slammed it, saying it will push the retail prices of houses upward; disqualifying many people from accessing mortgages and ultimately threatening the survival of companies operating in the housing sector.

“It will also further widen the national housing deficit, which is currently an albatross on the neck of government,” he continued in an interview with the Business and Financial Times.

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