Story by Eugene Nyarko Jnr. | Abossey Okai, Accra
The Abossey Okai Spare Parts Dealers Association has held a crucial stakeholder meeting with the Ghana Revenue Authority (GRA) to deliberate on concerns surrounding the proposed new Value Added Tax (VAT) regime.
Speaking in a press interview at her Abossey Okai shop, the General Secretary of the Association, Mrs. Gifty Lovelace Naana Fianu, disclosed that the meeting was convened following a press statement issued by the GRA inviting stakeholders for discussions.
According to her, the GRA Commissioner provided detailed explanations on the proposed VAT adjustments, particularly the shift from the existing 4 per cent flat rate to a proposed 20 per cent standard rate. She noted that traders were initially alarmed by the significant increase, describing the comparison between 4 per cent and 20 per cent as one that “does not make sense” at face value.
However, she admitted that the Authority’s explanation on input and output VAT mechanisms helped clarify aspects of the new system. “Per my understanding, the explanation wasn’t bad. If this education had been provided before the bill was passed into law, I don’t think we would have raised concerns,” she stated.
Mrs. Fianu said the Association proposed an alternative flat rate between five and eight per cent, arguing that a lower, flexible rate would encourage compliance among the large trading population at Abossey Okai and ultimately increase government revenue. “If the rate is low and everybody pays, the government will raise more revenue than imposing a high rate that only a few can comply with,” she emphasised.
She revealed that GRA leadership acknowledged the Association’s concerns but explained that the policy is currently at a six-month pilot stage. The Authority, she said, assured stakeholders that it would review feedback, identify shortfalls and make necessary adjustments after the pilot period. If the initiative proves ineffective, it would be revisited.
The GRA also urged all traders to register under the VAT system to ensure a level playing field, stressing that businesses that do not charge VAT could undercut compliant traders. On the issue of thresholds, Mrs. Fianu indicated that modifications are being considered to accommodate various categories of traders.
She further explained that traders who import goods and adjust consumer prices would be allowed to calculate their profit margins independently and pay VAT based on their declared profits. Additionally, traders unable to meet the standard threshold but who supply to companies may voluntarily opt into the standard VAT scheme, as VAT invoices are required for corporate transactions.
For smaller, tabletop operators, she disclosed that the GRA plans to introduce a tax stamp system to ensure they also contribute modestly to national revenue mobilisation.
Mrs. Fianu added that from March 1, traders operating under the standard threshold would receive machines to assist with VAT calculations and compliance.
While describing the engagement as productive, she emphasised that discussions are ongoing and no final agreement has been reached. “We are pleased with the explanation, but we have not concluded. There will be further engagements until there is a general understanding of the new VAT regime,” she noted.
She reiterated that earlier stakeholder education would have prevented the agitation that greeted the announcement of the new VAT proposal.
