VAT clears misconception on tax

Accra, Sept. 10. GNA - Mr Anthony Ackah-Mensah, Head of the Osu Ringway Estates VAT Local Office (LVO), on Wednesday asked traders to clear the misconception that the VAT Flat Rate Scheme (VFRS) deprived them of their input tax.

He said the three per cent VFRS was equivalent to the output and input mechanism employed under the standard 15 per cent VAT rate, and could therefore not make traders lose out. Mr Ackah-Mensah said this at a day's seminar organised by the LVO for traders to appraise the scheme and solicit their views on its implementation so far.

The VFRS was introduced last year to adopt a marginal rate that would make it easier for retailers to collect and account for VAT. Mr Ackah-Mensah indicated that research by the VAT Service has attested that the effective tax rate of most retailers stood around three per cent and this was fair.

He recalled that the VFRS was adopted in consultation with the umbrella body of traders, the Ghana Union Traders Associations. He therefore called on traders to cooperate with the Service, since the VFRS was adopted in their own interest to help generate more government revenue.

On the success of the VFRS so far, Mr Ackah-Mensah said there had been some improvements in revenue collection and expressed the hope that with time there would be a massive turnover. "Our doors are always open and we encourage our cherished traders to come to us at any time to get their grievances addressed." He further advised traders to submit their returns on time in order to skip the long queues that often occurred at the end of every month, due to last minute rush. Mr. Tony Dekagbe, Supervisor of Debt Management, explained that the VFRS excluded service providers, manufacturers, wholesalers as well as other zero-rated relief services and goods. He warned that failure to issue a VAT invoice, evasion of tax, failure to maintain proper records or obstruct an officer was an offence and could attract a fine not exceeding 1,000 cedis or imprisonment not exceeding five years.