Three Trade Associations yesterday called on the Ministry of Finance to regulate the exchange rate of the cedi to stabilise price on the market. The associations are the Ghana Union Traders Association (GUTA), the Association of Ghana Industries (AGI) and the Ghana National Chamber of Commerce.
They contended that if the cedi is not regulated, the withdrawal of the VAT will have no effect on prices. The call was made at a meeting between the Customs, Excise and Preventive Service (CEPS) and members of the three associations to brief them on the re-enactment of the sales tax regime.
The members stressed that the withdrawal of the VAT alone will not have any desired impact on prices since import duties are calculated against the soaring rate of dollar against the cedi.
Messrs Paa Kofi Ansong and J. K. Obeng both executive members of GUTA said in a liberalise economy like that of Ghana, no exchange rate is periodical pegged at a certain rate.
They suggested to the Ministry of Finance to regulate the exchange rate quarterly basis or twice every year to check the soaring prices AGI, called for reasonable exchange to make the withdrawal of the VAT more meaningful.
He said it is not enough to revert to sales tax of 15 percent and calculate import raw materials on same when the exchange rate changes daily. Mr. I.D. Ewum-Tohma, Commissioner of CEPS, said henceforth the sales tax 15 percent calculated on raw materials imported will not paid upfront at the port but would be deferred import sales tax.
Mr. Ewum-Tohma warned however that manufacturers who default in paying sales tax will not be allowed to enjoy that tax deferment. He called on manufacturers and traders alike to replace the VAT rate with the sales tax rate in their cost build up.
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