Accra (Greater Accra), 4 March '99 -
Accra (Greater Accra), 4 March '99 - The Value Added Tax (VAT) Service has identified non-sale of old stock by registered businesses as the main problem affecting the smooth implementation of the new tax system. A visit by some members of the VAT Oversight Committee to some businesses in Accra on Wednesday indicated that most businesses are loosing their customers due to the high prices on their old stock, which have been in their shops for more than six months. Only reduced prices of six months old stock would be refunded by the VAT Service. The visit was to enable the committee to acquaint itself with problems encountered by the businesses since the take off of the new tax system two months ago and to come out with solutions for effective implementation. According to some owners of shops visited, the problem is compounded by public perception that who ever charges VAT does not sell at reduced prices. They said ''the moment they see the VAT certificate, they turn away and we sometimes have to chase and convince them to come and buy from us.'' Some of the business establishments visited included shops at the 31st December market and Okaishie, Melcom, Multistores, electrical shops at the Opera square, spare parts shops at Abossey Okai and manufacturing and warehouse firms including Fan Milk Limited and IMEXCO, an import and export firm. Apart from the non-sale of old stock, most of the shop owners complained that prices of their wares such as cloth, flour, rice and spare parts are most of the time a little higher than the non-registered businesses who usually allow their customers to bargain. Agya Adu, a registered spare parts dealer, complained bitterly that out of the about 700 spare parts shops in his area, "only about five are registered and our customers who used to buy from us on credit have stopped coming". He attributed this to the fact that under the VAT system, it is difficult to deal with customers on credit basis. Mr Ezekiel Asamoah, Acting VAT Commissioner, said, even though, the Service cannot force people to register, the Oversight Committee would sit on the matter and deliberate on some of the issues raised, especially, the issue on whether the six months for the old stock can be extended. Only officials of Multistore, Melcom, Fan Milk and IMEXCO said they have so far not encountered any problems. Mr George Amissah, Chief Accountant at Multistore and Mr Daniel Annan, Finance Manager of Fan Milk said prices of their goods and products remain the same in spite of the reduction of the 15 per cent sales tax to 10 per cent VAT. They said this is due to other economic factors, which go into the fixing of their prices.
