Business

Prices of goods to go up by 12% over implementation of amended VAT

Published

4 months ago

February 9, 2022

Consumers may have to pay an increase of about eight to twelve percent from February for some commodities should the Ghana Revenue Authority (GRA) implement the amended Value Added Tax (VAT) rate.

This is according to the Importers and Exporters Association of Ghana (IEAG).

The association says, the amendment, which was gazetted on December 31, 2021, will see the business community move from paying a three percent flat rate plus one percent COVID-19 levy to paying VAT of about twenty percent.

They further lamented that businesses with capital from GH¢500,000 would be paying more than twenty percent even though standard VAT should not be more than 12.5 percent per the amendment.

In an interview with Citi Business News, General Secretary of the Importers and Exporters Association of Ghana, Samson Asaki Awingobit said the amendment would affect goods that had already been cleared in 2021 and are yet to be sold.

He added that business operators and retailers would have no option other than to pass on the difference to consumers.

Now government is saying that go and do 12.5 % plus GETFund of 2.5% plus health insurance 2.5% plus COVID-19 levy 1%. So when you look at the minus and plus, they are increasing VAT by about 19.2 out of which we can only claim about 12.5%. The rest cannot be claimed which becomes a cost to us and that is why we are saying that prices of goods will go up by eight to twelve percent if government refuses to engage us.”

The government knows very well that if they make this information public, Ghanaians will ask them why this is so because this amendment was made on the 31^st of December and they wanted to implement it in January, but they realized the benchmark value was occupying the space so they were quiet but they have just issued guidelines to the various communities. But the point here is that others have got their goods and paid. During the time that they were buying the goods, they have done their calculations within the three percent”.