In the approaching presentation of the 2023 budget, the Ghana National Chamber of Commerce and Industries (GNCCI) has demanded that the new Value Added Tax (VAT) regime be repealed. The new VAT system has put businesses in a challenging scenario where prices of goods and services are subsequently rising, claims GNCCI.
In its submission for the government’s 2023 budget, the Chamber of Commerce said that “the three percent flat rate VAT review in July 2017 continues to negatively affect enterprises since it does not allow for the transfer of the 17.5 percent that must be absorbed by firms.” “In addition, companies will be required to levy a three percent output VAT, which will raise the cost of the aforementioned product. Local firms are now unable to compete due to the new VAT system.
The Chamber stated in its government budget contribution that it thought the current VAT system should be changed back to its pre-2016 state because it was necessary for businesses to significantly reduce their profits to remain competitive. This had an impact on business growth, employment, tax revenue, and the sustainability of businesses.
The GNCCI also urged the government to reconsider lowering the 1.5% rate and stagger it within the range of 0.5% to 1.0% to ensure that the Electronic Transaction Levy accomplishes its goal. According to its study, this wouldn’t hamper the expansion and viability of the nation’s businesses. The high base cost of doing business in Ghana is already exacerbated by the overabundance of indirect taxes.
The Chamber also urged the Ghana Revenue Authority to expedite the application process for refunds of excess tax payments, noting that while the tax laws give taxpayers a right to return excess tax payments, the refund process is complicated.
“Taxpayers are not aware of any specific GRA office responsible for processing refund requests. Taxpayers must make repeated attempts to follow up and, in most cases, must give up, which leads to a loss of working capital in addition to stress and frustration, it said.
