The President of the Affiliation of Ghana Industries (AGI), has warned authorities in regards to the present Worth Added Tax (VAT) system describing it as “the killer within the room” that’s crippling native companies.
Dr Humphrey Ayim-Darke was emphatic in regards to the pressing want for complete VAT reform to forestall additional market distortions and operational hardships for corporations, particularly small and medium-sized enterprises (SMEs).
“The key tax subject that we have now tabled is the rationalization of the VAT. We consider strongly that it’s distorting lots of operations,” he mentioned on Pleasure Information’ PM Categorical Enterprise Version on Thursday, February 20.
He painted a vivid image of the systemic flaws, explaining, “Think about two corporations working in the identical sector, each importing the identical product and paying the identical HS code for uncooked supplies.
“But, due to how the VAT is utilized, their remedies are utterly completely different. That inconsistency is distorting the market and hurting competitiveness.”
Dr. Ayim-Darke made it clear that the AGI’s foremost proposal to the Finance Ministry is a complete overhaul of the VAT regime.
“If you wish to implement a complete VAT at 21%, then we are saying effective, let’s do input-output VAT correctly,” he argued.
“However don’t embed levies inside it that find yourself distorting our whole operations. If you try this, companies are left with no alternative however to move the fee onto customers, which defeats the aim of honest taxation and stifles financial progress.”
He additional burdened that VAT reform shouldn’t simply be about altering charges but in addition about making certain equity and compliance.
“As soon as VAT is rationalized, it turns into the federal government’s duty, via its businesses, to supervise compliance and guarantee correct assortment. Companies shouldn’t be burdened with inefficiencies within the system,” Dr. Ayim-Darke emphasised.
Whereas acknowledging the federal government’s efforts in addressing different taxes, such because the removing of sure COVID-related and betting taxes, Dr. Ayim-Darke insisted that the first concern stays the VAT.
“Sure, we welcome the steps taken on these taxes—it’s a 60% choose of our considerations—however let’s not child ourselves. The VAT is the largest hurdle. It’s the elephant within the room—or as I name it, the killer within the room. If we don’t streamline it now, the repercussions for native industries shall be dire,” he warned.
Dr. Ayim-Darke concluded with a rallying name for the federal government to behave decisively.
“Our message is easy: rationalise the VAT. Take away the distortions, stage the taking part in area, and let’s assist native industries to thrive as a substitute of suffocating them underneath unfair tax buildings,” he mentioned.
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