Government is being urged to reconsider its current calculation of Value Added Tax (VAT) on indigenous companies whose annual revenue exceed GHS 500,000 per annum to reduce the economic burden on local industries.
According to the Association of Ghana Industries per the current calculations of VAT of 15% and the summation of the COVID levy, GETFUND and NHIS levy amounting to 6% coupled with other cost of production were negatively impacting the growth of local industries.
In an interview with Citi Business News, the Greater Accra Chairman of AGI, Tsonam Akpeloo impressed on government to relook the development.
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“The way the VAT is being calculated currently means that we are being charged double or we are paying VAT on VAT. This essentially means that government adds the levies i.e. NHIS, the Covid and GETFund which is totaling 6 percent to cost of the products before applying the VAT and the other levies again,” he said.
“In effect, one business, one transaction we have to pay double tax and this calculation is not helpful. Already Industries are struggling, there is no point in getting them to pay tax in this manner so we want government to reconsider its computation and reverse it to the time before 2017,” he appealed.
In November 2022, Government announced its decision to increase the Value Added Tax (VAT) by 2.5 percent.
This moved the tax policy from its previous percentage of 12.5 per cent to 15 percent.
Government has since also justified the need to maintain the COVID levy to help rake in revenue to implement its projects.