A Charterd Accountant cum Founder of Premier Networking Investment Club (PNIC Group) Nana Kwame Snr has disclosed that, Government of Ghana has reportedly increased the Value Added Tax (VAT) from 4% to 19.125%.
He explained that, Retailers have been slapped with a total of 19.125% Value Added Tax (VAT) after amending the VAT Act amidst the controversial Electronic Transfer Levy (E-levy) bill brouhaha.
In a statement put out by Emmanuel K. Dogbevi believed to have been coming from a Charterd Accountant Nana Kwame Snr, revealed that, while Ghanaians were busy ranting over the introduction of a certain 1.5% Electronic Transfer Levy, government has introduced and implemented an amendment to the VAT Act limiting the application of the flat rate scheme to retailers with turnover exceeding GH¢500,000.
This means that retail shops like Palace, Melcom, Marina, Shoprite and Game which previously charged 4% sales tax which entails 3% flat tax VAT and 1% covid-19 levy will now charge the full effective standard VAT tax rate of 19.125% on your purchases.
According to him, if you have noticed that cost of your groceries have gone up, this will be a contributing factor. This may not affect the regular trader at Makola, so you may want to consider changing your shopping spot.
Value Added Tax (Amendment) Act, 2021, Act 1072
The Act has amended the Value Added Tax Act, 2013, (Act 870) to limit the application of the flat rate to a retailer with turnover not exceeding GH¢500,000 annually and extended the VAT zero-rate on African textile prints for local textile manufacturers for a period of two years.
The Act provides that a taxable person who is a retailer of goods and makes at the end of any 12 months, a taxable supply not less than GH¢200,000 but not exceeding GH¢500,000 to account for the VAT payable at a flat rate of 3% calculated on the value of the taxable supply unless otherwise directed by the Commissioner-General (CG) of Ghana Revenue Authority (GRA) in writing.
“The Second Schedule to the VAT Act has been amended in Paragraph 2 to recognize a supply of locally manufactured textiles up to 31 December 2023 by a local manufacturer who has been approved by the Minister responsible for Trade and Industry as a zero-rated supply.