Delivering the 2018 mid-year budget review, Finance Minister Ken Ofori-Atta announced in Parliament that the VAT will remain 12.5 per cent.
This was contrary to expectations and claims by many especially the Minority in Parliament that a decision has been reached by government for an upward adjustment of the Tax.
Many welcomed Mr Ofori-Atta’s announcement with a sigh of relief but Mr Terkper says it is “a retrogressive step and a further mutilation of the VAT regime”.
It is a VAT increase in disguise. Businesses should not rejoice yet because they cannot claim Input Tax Credit/refunds on 5% of the current 17.5 percent rate. Already, the Flat Rate is denying some registered businesses refunds and Input Tax Credit
— Seth Terkper (@SethTerkper) July 19, 2018
Tweeting a few moments after the reviewed budget was read, Mr Terpker stated: “It is a VAT increase in disguise”.
Ghana's VAT rate is 17.5 percent and that includes NHIL (2.5%) and GEFund (2.5 %). Removing them from the VAT base and making them specific rates (instead of ad valorem) and increasing that rate to earn more revenue (quoting Hon Kwarteng) is a ruse.
— Seth Terkper (@SethTerkper) July 19, 2018
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