The Ghana Revenue Authority (GRA) believes that the new VAT reduction in Ghana is already having a noticeable impact on customers.
According to the Authority, the tax cut has put over GH¢6.5 billion back into the hands of consumers, contributing to a decrease in the cost of products and services across the country.
According to GRA, the action is intended to support enterprises who are having difficulty recovering from economic constraints, increase consumer spending, and lessen the cost of living burden on households.
Following a reduction in the effective VAT rate to 20%, prices have decreased by about 1.9% since the revisions.
GRA Commissioner-General Anthony Kwasi Sarpong emphasised the early achievements of the reforms while speaking at a VAT compliance monitoring exercise at malls in the Spintex area.
“The reforms include a VAT rate reduction, the removal of the COVID-19 levy, VAT decoupling, and increased thresholds for small businesses,” he stated.
“These changes reduce the tax burden on essential goods and services, allowing retailers to pass savings directly to consumers. It’s a boost to purchasing power at a time when many Ghanaians are still feeling the effects of inflation and economic slowdown.”
Palace Mall, Melcom, Orca Décor, United Commercial Trading, and Palace Home Décor were among the stores visited during the exercise that attested to having upgraded their systems to reflect the new VAT rates.
Customers at these stores reported cheaper costs at the registers and applauded the cuts.
Sarpong advised companies to continue adhering to the new structure and asked customers to consistently ask for VAT invoices.
“Sustained compliance by both businesses and consumers is essential to mobilising revenue, which supports economic growth, job creation, and national development,” he stated.
Although many people have benefited from the VAT drop, the Ghana Union of Traders Association (GUTA) has voiced concerns about the increase in the VAT flat rate from 4 to 20 percent, cautioning that small firms may be severely impacted.
However, the GRA reaffirmed that in order to ensure that the intended benefits are felt nationwide, dealers and consumers must consistently adhere to the new tax regulations for the changes to ultimately succeed.
Source: newsthemegh.com