2023 Budget: GNCCI wants new VAT regime abolished
The Ghana National Chamber of Commerce and Industries (GNCCI) has called for the repeal of the new Value Added Tax (VAT) regime in the upcoming presentation of the 2023 budget.
According to GNCCI, the new VAT regime has positioned businesses in a difficult situation where prices of goods and services are consequently being increased.
Making its input into the 2023 budget for government, the Chamber stated that, “the 3% flat rate VAT review in July 2017 continues to negatively impact businesses as it does not allow for the transfer of the 17.5% to the final consumer which has to be absorbed by businesses”.
“Further, businesses will have to charge 3% output VAT, increasing the price of the product in question. This new VAT regime is making local businesses uncompetitive.”
As part of its contribution to the budget, the Chamber believes that, in order for businesses to stay competitive, they have to significantly cut back their profits which has implications for business growth, employment, tax revenue, and sustainability of businesses.
“The current VAT regime should be reverse to its original (2016) state”, the Chamber mentioned.
To ensure that the Electronic Transaction Levy achieves its objective, the GNCCI also called on government to once again reviewed downwards the rate of 1.5%; and stagger it within the bands of 0.5% to 1.0%.
Per its analysis, it said, this will not stifle the growth and sustainability of businesses in the country.
Already, there are too many indirect tax handles that add to the high productive cost base of doing business in Ghana.
The Chamber also called on the Ghana Revenue Authority to fast-track the refund application process of excess tax payments, adding, although the tax laws allow taxpayers an entitlement over their excess tax payments, the process of the refund is cumbersome.
“There is no particular office at the GRA known to taxpayers that handles the refund applications. Taxpayers have to follow up on severally and in most cases, they have to give up and this results in loss of working capital in addition to the stress and frustration”, it quipped.
