VAT will not be increased in Mid-Year Budget Review


Mid-Year Budget Review must show how job initiatives are doing



General News of Wednesday, 18 July 2018

Source: citinewsroom.com

Ken Ofori-Atta, Finance Minister

Citi Business News can confirm that government will not increase the Value Added Tax (VAT) in the Mid-Year Budget Review, contrary to earlier reports that government was going to announce an increase in the rate for VAT.

The Minority in Parliament earlier this week launched a scathing attack on the Akufo Addo administration, describing it as an insensitive government, for planning to introduce new taxes and increase existing ones.

Minority Spokesperson on Finance, Cassiel Ato Forson at a Minority Mid-year budget roundtable said government will in the mid-year budget review which will be presented to Parliament tomorrow (July 19, 2018) announce excise tax on luxury vehicles (10 % on vehicles with engine capacity above 3.5 cc), an increase in the communications service tax (from 6% to up to 12%) and the re-introduction of VAT on financial services which was scrapped in the 2017 budget.

But information picked by Citi Business News shows that government has insisted that VAT will not be increased.

Background

Earlier, businesses have warned that any increase in consumption based tax will affect the prices of goods and services.

The National Welfare Chairman of the Ghana Union of Traders Association (GUTA) Benjamin Yeboah had said government must desist from increasing consumption based taxes.

“As businesses we always look for a conducive environment to do our business. So any tax that is problematic for us needs to be looked at. Imposing taxes is not the way to go when you want to raise revenue. Government needs to widen the tax net to bring in more businesses and persons that are not paying taxes. Also looking at our ports of entry, want taxes like the 2% special import levy to be reduced or removed. We’ve also heard that there might be an increase in the VAT at the ports. That will be problematic because it will end up being passed on to ordinary Ghanaians in the form of increased prices,” he explained.



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