Although the new Value Added Tax (VAT) rate has taken effect, some businesses in Accra are yet to apply the new rate of 15 per cent on the value of goods and services offered.
A visit to some shopping centres in parts of Accra revealed that the businesses were using the old standard VAT rate of 12.5 per cent instead of the new rate which was passed by Parliament in the Appropriation Bill.
Some of the shops visited included ShopRite, Telefonica, Barcelos, Mall Pharmacy and Banana Home.
The government reviewed upwards the Value Added Tax (VAT) by 2.5 per cent in the 2023 budget statement which the Finance Minister, Ken Ofori-Atta, delivered to Parliament on November 24, 2022.
The Finance Minister explained that the review was part of a seven-point agenda to boost the domestic revenues as the increase was expected to yield GH¢2.70 billion, which would be used to augment funding for road infrastructure development.
VAT is charged on the supply of goods and services where the supply is a taxable supply and made by a taxable person in the course of business.
Taxable persons or VAT-registered persons are to use a Ghana Revenue Authority (GRA)-approved fiscal electronic device to issue a fiscal receipt to each customer. The fiscal receipt is to contain the information as specified in the Taxation (Use of Fiscal Electronic Device) Act, 2018 (Act 966).
Shops visited
When the Daily Graphic interacted with the managers of the shops and some shoppers, they all expressed concern over the current economic hardship and high cost of goods and services.
Most of the shop managers indicated that they were unable to apply the new VAT rate as it would result in an increment in the prices of their products while consumers were already complaining about the high prices.
The electronic receipts issued to most of the customers who spoke to the Daily Graphic showed the old VAT rate of 12.5 per cent.
The Managing Director of Barcelos Restaurant, Celine Owusu-Afari, said her company had not yet applied the 2.5 per cent VAT increment since it recently increased its prices ahead of the festive period.
Notwithstanding, she said the company had put in place measures to pay the due taxes to the government.
“Whatever we would have to pay to the government would be paid by the end of each month. We might revise our prices later in the year .”
The lead at Shoprite who failed to give her name said the new VAT rates had not been applied yet because even with the regular VAT percentage, customers were complaining about prices being high.
The Manager of Telefonika West Hills Mall branch, Latifa Abdallah, said the 2.5 per cent increment would drive away customers since they could not pay such high amounts for VAT.
The Manager of Banana Home, Daniel Okyere Baiden, complained bitterly about low patronage and indicated that his company was yet to apply the new rate at the West Hills Mall branch .
He said consumers were not happy with the existing prices of goods which they claim were high and had been calling for a downward review of prices.
As a result, he said it would be difficult to apply the new VAT rate of 15 per cent.
Shop attendants at the Mall Pharmacy did not want to comment when approached over the issue but checks from receipts of some customers who had patronised products from the shop showed the old VAT rate was still being applied.
Consumers concern
Some customers who spoke to the Daily Graphic stated that they would want to be responsible citizens by paying taxes for development projects. However, they called on the government to reconsider its decision and maintain the old VAT rate or possibly review the VAT rate downwards.
One of the shoppers, who only gave her name as Abena, said she didn't consider the VAT percentage when she bought an item. "I just buy what I have to buy and leave but it is unfortunate the prices are overwhelming in recent times".
Another customer, Jack, said "the prices were too high. We are pleading with the government to help us".
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