Business News of Monday, 10 July 2017
The Ghana Union of Traders Association (GUTA) has stated that it fully supports the VAT Flat Rate Scheme (VFRS), which is a very good policy that would ensure fairness in the business environment.
According to GUTA, the vast majority of traders, wholesalers and retailers who are captured under the VFRS are in support of the arrangement.
Barima Ofori Ameyaw, President of GUTA made this known when the leadership of the group petitioned the Parliamentary Committee on Finance at Parliament House.
The Association of Ghana Industries (AGI) had raised concerns on the implementation of the VFRS, which they claim would lead to price increases.
The AGI subsequently petitioned Parliament Committee on Finance and the Committee invited the various stakeholders including the AGI, GUTA among others to come and make their contribution on the issue.
While the Parliament Committee on Finance was meeting the AGI, GUTA also came in with their petition to state their position on the matter.
Barima Ameyaw also stated that the group consider VFRS a key intervention of government that would go a long way to even help Ghanaians grow their businesses while simplifying the tax calculations.
He explained that the VFRS closed certain loopholes that was exploited under 17.5 per cent VAT arrangement.
He said the claiming of VAT refunds after input had been included in the price build-up is effectively dealt with under the new scheme, adding that this ensured that all businesses would compete fairly, giving no unfair advantage to wrongdoers.
Barima Ameyaw also stated that GUTA members who would be the implementers of the VFRS did not agree that the new policy would lead to price increases.
“To our understanding, this is just a matter of calculations and if right will not result in any changes in prices as your committee is being led to believe. This system has been with us for over a decade and has never resulted in price increases,” he added.
He called on the Ghana Revenue Authority to continue to engage with businesses for them to iron out all outstanding issues.
Barima Ameyaw stated that the VFRS created parity in the trading environment.
He explained that thresholds were not enough segregation points because in the marketplace, they did not exist.
“We all sell in the same market thus using thresholds to segregate is no solution” he said.
Barima Ameyaw noted the previous system had issues which led to low compliance since the customer was not under any obligation to buy from VAT-registered persons.
He said the VFRS should not be scrapped for any reason because a lot of businesses that were captured under the scheme were in support of it.