Importers upset over 3% VAT flat rate; insist it's collapsing businesses - Ghana Home Page, News,Sports,Facts and Business- VIPI NEWS. GH

Importers upset over 3% VAT flat rate; insist it's collapsing businesses

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The WISUG says the 3% VAT flat rate is hurting their businesses
Members of the Wholesalers, Importers and Shop Owners Union of Ghana (WISUG) have complained bitterly about the 3% VAT Flat rate, claiming that the new move has contributed to high cost of duties at the port.

Government, in July this year, directed that the new Value Added Tax (VAT) 3% flat rate be implemented. This follows the amendment of the Value Added Tax Act, 2013 (Act 870) by parliament in April this year to reduce VAT from 17.5% to 3%.

The move is in pursuance of the government’s policy to widen the tax net by roping in more taxpayers, especially retailers and wholesalers who hitherto did not meet the VAT’s current threshold of GH¢200,000.

However, importers say the initiative is hurting their businesses as they are unable to breakeven after the sales of their products, adding that they record low sales as prices of their goods have been increased as a result, which significantly limits buyers’ purchasing power.

“Most of the times the officials say duties have not been increased. We as traders want them to decrease the cost of duties for us so the cost of goods can also be reduced to make them affordable for buyers.

We really like today’s government, but we don’t want the current situation to push us to excessively increase the prices of goods. That is why we have invited them today to come and listen to our worries and address them for us because we are losing our business capital in the payment of duties”, the association’s chairman, Joseph Abloh said.

These concerns were made during an encounter with some officials of the Ghana Revenue Authority (GRA) in Accra, which sought to discuss the new 3% tariff, the computation of the new port paperless transaction system, among other issues.

Cynthia Ankomah, an importer who deals in biscuits told the B&FT in an interview that the VAT, coupled with other expenses they have to incur in the business process, they end up being burdened and at the end of the day are compelled to pass on the cost to consumers.

“In fact, our problem today is the import duties that we are paying is just too much. Within the last two months, every day you go to the port to clear your goods which are the same quantities, the import duty is over the bar. You cannot even predict it.

I import Soda Biscuit, and the last time I imported, the duty was GH?30,000 including the agency fee and all other charges. Today, as I am speaking, the duty for that same quantity is GH?62,000, which in this sense is more than 100%, and the VAT on the duty alone is ?19,000 which is just too much.

Meanwhile, I am expected to sell it and pay 3% on the total value of the products every month. Aside this, company tax is waiting for me, I will pay workers, and because I borrow from the bank and I am being charged 30% interest, it becomes difficult. In fact, they are kicking us out of our jobs, and they should just do something about this duty thing for us”, she added.

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