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| VAT Service to introduce Flat Rate for traders |
3/16/2007 |
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Cape Coast, March 15, GNA - The Value Added Tax (VAT) Service in collaboration with the Ghana Union Trades Association (GUTA) is to introduce a Flat Rate Scheme (FRS) for retail traders on a pilot basis. "The Flat Rate Scheme is a VAT collection or accounting mechanism that applies a marginal tax percentage representing net VAT payable on the value of taxable goods supplied," Mr Anthony Ewereko Minlah, VAT Commissioner, explained.
He was speaking at the "Media, SMEs Dialogue" series at Cape Coast under the theme "using the media to promote small scale and business concerns".
Mr Minlah said that the law on FRS had been passed waiting for Presidential ascent.
The workshop was jointly organised by the Ghana Journalist Association (GJA) and KAB Governance Consult to educate SMEs on VAT. The VAT Commissioner said the FRS had been restricted to a specified sub-sector of retail trade, adding that, a marginal 3 percentage of tax would be charged by FRS traders on their taxable supplies since it was an alternative to the invoice credit method of VAT accounting. Mr Minlah said the scheme would be extended to other sectors if it was successful and stressed the need for all qualified businesses to register with the Service and to endeavour to keep records of their sales and purchases, invoices and VAT charged.
He said it was the obligation of all registered businesses to submit monthly returns of sales and purchases made on their VAT forms, adding that, section 56 of the VAT Service Law prescribed sanction for business that failed to register and pay VAT.
The Commissioner announced that committees had been formed in the regions to ensure that all businesses were registered and hinted that an Intelligence Unit would soon be put in place to monitor businesses on compliance.
Mr Minlah said the Service had targeted to collect 30 trillion cedis revenue this year as against 26 trillion collected last year. He said everything would be done to close all the loopholes to ensure that the target was met.
The VAT Commissioner asked people to report businesses that were qualified to register and collect VAT, as well as VAT officials who received bribe to influence the payment of VAT by businesses. He called on consumers to demand VAT receipts and invoice for services and goods they pay for, saying, this was the best way they could assist the Service to ensure compliance.
Mr Kwesi Afriyie Badu, Chief Executive Officer of KAB Governance Consult, suggested the amendment of the VAT law to make it possible for businesses to be reimbursed for purchasing VAT invoices and receipts. Mr George Ebo Sackey, Regional Chairman of GJA, advised SMEs to engage the services of qualified professionals to audit their accounts and to keep their books.
The Participants commended GJA for the workshop and expressed concern about the number of taxes they paid. They suggested that VAT invoices and receipts should be given to them free of charge since they were collecting money for the state. They also suggested that a mechanism should be put in place to get all qualified businesses to register to avoid disparities in the payment of VAT. 15 March 07Source:
GNA
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