VAT closes stores in Okaishie

Accra, July 26, GNA -- The VAT Service on Wednesday closed down a number of stores in Okaishie in the Central Business District of Accra for not registering with the Service.

Some of the shops closed were Little London Shopping Centre; Elizabeth Adade Enterprise; Skin Light Cosmetic Shop; Frey Enterprise; Escape Cosmetics and Proton Enterprise.

Mr Alfred Twumasi Ntiamoah, Principal Revenue Officer and Head of Okaishie VAT Office, told newsmen that the shops, which belonged to importers; distributors and retailers, had failed to register with the Service, even though there eligible for registration. Twenty shops have so far been closed down since the exercise began last week.

Mr Ntiamoah said lack of understanding on how the Value Added Tax (VAT) system operated was deterring most traders from registering with the Service.

He said most traders failed to understand that VAT was paid by customers and not charged on their capital or profit margin. Mr Ntiamoah said Okaishie, which was a major trading centre in the capital, was expected to generate at least four billion cedis annually as VAT revenue for the Government, but only 2.8 billion cedis was currently being collected.

He said although the Service had often organized sensitisation programmes for traders' associations such as the Accra Shop Owners Association, the Ghana Electrical Dealers Association and the Second Hand Traders Association, the members were still reluctant to register. Mr Ntiamoah stated that there was the need to strengthen the judicial system, to enforce the Law on those, who refused to register to serve as a deterrent to others.

"It is very unfortunate that although the Law says that defaulters should at least be fined not less than 10 million cedis or jailed for five years, a trader was fined only 20,000 cedis by a Court at Takoradi", he said.

Mr Ntiamoah urged leaders of Traders' Associations to encourage all their members to register and advised customers to demand a VAT invoice whenever they bought items from registered companies.