Government increases VAT from 4% to 19.125% – Nana Kwame Snr

Ghana Revenue Authority (GRA)
Ghana Revenue Authority (GRA)

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.

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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.

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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.

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“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.

SOURCE: Coverghana.com.gh

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