The introduction of a flat rate of three percent in Value Added Tax (VAT) payment for traders in Ghana has received the applause of sections of the traders.
Joseph Obeng, National Organizer of the Ghana Union Traders Association (GUTA), comprising retailers and petty traders, told the media at a press briefing Thursday the new flat rate would ease the burden on both traders and consumers.
“We entreat government to do what it has started. When you look here, they are all from the trading sector. We represent the great majority. About 98 percent, I must tell you as the leader of the trading community, are in full support of this and we thank government for bringing it back,” he insisted.
Ghana operates a 17.5 percent VAT system with businesses above a certain threshold made to collect the consumer tax on behalf of government. The current government has however introduced a flat rate of three percent for traders while maintaining the 17.5 percent for larger businesses.
Hajia Muira Buari, a dealer in electrical goods, expressed hope that with the new flat rate, many more people would be roped into the tax net, thereby enabling government to mobilize more revenue.
“We think the three percent is the best way because most of our members are on the three percent and we expect most people to come on it. When it is more than three percent, just few people will be on it and it is not going to help government.” Buari said.