Former Finance Minister, Seth Tekper, has urged businesses in the country not to rejoice over the 2018 mid-year budget review which supposedly tried not to increase VAT across board.
According to Terkper, the budget review with regards to separating NHIL and GETFund levies from the 17.5% flat VAT rate is actually a VAT increase in disguise.
“Ghana’s VAT rate is 17.5 percent and that includes NHIL (2.5%) and GETFund (2.5 %). Removing them from the VAT base and making them specific rates (instead of ad valorem) and increasing that rate to earn more revenue (quoting Hon Kwarteng) is a ruse,” he stated in a series of tweets on Thursday.
RELATED: No increase in taxes – Finance Minister assures
“It is a VAT increase in disguise. Businesses should not rejoice yet because they [NPP] cannot claim Input Tax Credit/refunds on 5% of the current 17.5 percent rate. Already, the Flat Rate is denying some registered businesses refunds and Input Tax Credit,” Terkper added.
Terkper went on to argue that: “the measure amounts to a parallel Sales Tax regime that the VAT replaced. It is a retrogressive step and further mutilation of the VAT regime.”
“The removal of Input Tax Credit and Refunds will increase costs and prices. It is not an efficient and business-friendly move,” the former Finance Minister added.