Business Groups in Ghana are sharply divided over the implementation of a controversial 3 percent Value Added Tax (VAT) Rate.
The reintroduction of the rate which came into force on July 1, has been met with some stiff opposition from some business groups such as the Association of Ghana Industries (AGI) and the Food and Beverage Producers Association of Ghana.
The AGI for instance want government to hold further consultations with the business groups before going ahead to implement the scheme.
The Food and Beverage Producers Association on the other hand has warned it will pass on the cost to consumers. The Ghana Union of Traders GUTA on the other hand is happy with the implementation of the VAT Flate Rate.
A meeting between the Finance committee of parliament and the Business Unions on Thursday ended inconclusively due to divisions between the business associations.
Meanwhile the Association of Ghana Industries (AGI) wants the government to immediately put the implementation of the three percent VAT flat rate on hold. According to them, it could force businesses to pass on the cost to consumers and lay off workers.
However, the Deputy Finance Minister Kwaku Kwarteng said the introduction of the flat rate is to aid government in plugging loopholes in the generation of revenue in the country.
“I am not surprised the Ghana Union of Traders are comfortable with the implementation of the scheme her said”. “For those who are saying they will increase their prices, consumers now have a choice,” Mr Kwarteng added. He noted based on consultation so far, the reintroduction of the 3 percent Vat flat Rate is a good initiative.
Source: Africafeeds.com / Fred Dzakpata
