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It is time to review VAT policy – GRA supports calls by business associations

The Ghana Revenue Authority (GRA) has joined calls for policy reforms to simplify the country’s tax administration.

According to the Commissioner General Julie Essiam the current Value Added Tax (VAT) structure makes it difficult for individuals and businesses to comply.

She made this call at the 12th Annual International Tax Conference organized by the Chartered Institute of Taxation, Ghana.

“These policies must be simple and easy to understand by everyone and all of us. As we look into the future as a revenue authority, we believe that the future tax policies should focus on the simplification of tax handles.”

“For example, we must work towards having a simple rate for VAT and avoid the perceived cascaded effect of the simplicity of rates under the current regime,” she added.

She furthered that a review of the policy will greatly enhance compliance among private sector businesses.

“Tax policies must therefore be flexible enough to grow and optimize tax revenues in tandem with private sector development.”

Ghana is under pressure to improve its domestic revenue inflows. The current economic challenges and the country’s inability to raise funds from the international capital market has made it imperative to boost domestic revenue generation.

The Ghana Revenue Authority (GRA) announced in July, 2024 that it collected GH¢68.05 billion for the first six months of 2024, exceeding its mid-year target by GH¢138.69 million, representing 0.2 per cent excess collection by the authority.

Businesses advocate review of VAT

Business associations, including the Ghana Union of Traders Association (GUTA), ad the Association of Ghana Industries (AGI) have consistently call for a review of the current VAT system describing it as disincentive to the private sector.

GUTA has partly blamed the current VAT system on the price hikes in the market.

CIT input

On his part, President of the Chartered Institute of Taxation, George Ohene Kwatia advocated for a national tax policy to harmonize activities in the sector.

He maintained that this will help support political parties and streamline the tax policies.

“If you have a true national policy, it will drive the tax agenda. This will serve as a guideline for every government that comes to power. This will avoid frequent changes in our tax regimes based on the government in power.”

12TH Annual International Tax Conference

The conference was organized by the Chartered Institute of Taxation, Ghana.

It aims to create a unique platform for policy makers, academia and tax professionals to share ideas on improving the country’s tax regime.

It encourages conversations on the development and implementation of tax reforms which creates an enabling environment for businesses to thrive.

The 3-day conference, which ends on the August23, 2024 is on the theme ‘Balance tax policy and private sector development’.

Source:JoyBuss

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