Although the new Value Added Tax (VAT) rate has come into effect, some businesses in Accra have yet to apply the new rate of 15 percent to the price of goods and services they offer.
A visit to some shopping malls in parts of Accra revealed that the businesses are using the old standard VAT rate of 12.5 percent instead of the new rate provided by Parliament in the Appropriation Bill.
Some of the stores that opened include ShopRite, Telefonica, Barcelos, Mall Pharmacy and Banana Home.
The government reviewed the Value Added Tax (VAT) increase of 2.5 percent in the 2023 budget statement which was sent by the Minister of Finance Ken Ofori-Atta to Parliament on November 24, 2022.
The Minister of Finance explained that the review is part of a seven-point agenda to boost domestic revenue as the increase will generate GH¢2.70 billion, which will be used to increase funds for road infrastructure development.
VAT is charged on the supply of goods and services where the supply is a taxable source and is made by a taxable person in the course of business.
Taxable persons or VAT registered persons must use an electronic fiscal device approved by the Ghana Revenue Authority (GRA) to issue fiscal receipts to each customer. The fiscal receipt contains information as specified in the Taxation (Use of Fiscal Electronic Devices) Act, 2018 (Act 966).
The store opened
When the Daily Graphic interacted with store managers and some shoppers, they were all concerned about the current economic difficulties and the high cost of goods and services.
Most store managers indicated that they could not implement the new VAT rate because it would increase the price of products when consumers had already complained about the high prices.
Electronic receipts issued to most customers who spoke to the Daily Graphic show the old VAT rate of 12.5 per cent.
The Managing Director of Barcelos Restaurants, Celine Owusu-Afari, said her company has not yet implemented the 2.5 percent VAT increase as it recently increased prices ahead of the holidays.
However, he said that the company has adopted measures to pay the taxes paid to the government.
“Whatever we have to pay to the government will be paid at the end of every month. We may revise the price at the end of the year.
An executive at Shoprite who did not give his name said the new VAT rate had not been implemented because despite the regular VAT percentage, customers complained about the high prices.
Telefonica West Hills Mall branch manager Latifa Abdallah said the 2.5% increase would drive away customers as they could not pay the high amount of VAT.
The manager of Banana Home, Daniel Okyere Baiden, complained bitterly about the low patronage and pointed out that his company has not implemented the new rates at the West Hills Mall branch.
He said that consumers are not happy with the prices of products that are claimed to be high and are asking for reviews to come down.
As a result, he said it would be difficult to implement the new 15 percent VAT rate.
Store clerks at Farmasi Mall did not want to comment when approached about the issue, but a check from the receipts of some customers who had products from the store showed the old VAT rate still applied.
Consumer concerns
Some customers who spoke to the Daily Graphic expressed that they want to be responsible citizens by paying taxes for development projects. However, he asked the government to reconsider its decision and maintain the old VAT rate or perhaps review the VAT rate down.
One shopper, who gave her name only as Abena, said she did not consider the VAT percentage when buying goods. “I only buy what I have to buy and leave it but unfortunately it costs a lot these days”.
Another customer, Jack, said that “the price is too high. We are asking the government to help us”.
Source: graphic.com.gh
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