The business community at Adum in the Ashanti Region is demanding the government shifts the VAT rates from retailers of fast-moving goods to the point of entry for all goods at the ports or local factories.
It has cited the 4 percent VAT Flat rate and the 6 percent VAT standard rate in this regard.
In a press conference addressed by Charles Kusi Appiah Kubi, the Executive Secretary of Ashanti Business Community complained of the high and unrealistic tax system, the high cost of borrowing rate, the low gross margin, the high inflation rate and forex hikes.
He stressed that “businesses are unable to charge neither the 6 percent nor 4 percent VAT on goods sold.”
All these have culminated in the protest that has seen some traders in Kumasi lock up their shops.
The traders particularly in Adum have closed their shops for three consecutive days over what they describe as the high cost of doing business.
The group also said the Government’s inability to achieve its revenue mobilization target is “an indication that the fundamental challenges with VAT need to be addressed as a matter of urgency.”
“We strongly recommend government should adopt more sustainable and business-friendly tax policies that would help government optimise its revenue mobilization whilst promoting business growth,” it added.
Outlining the reasons for the protest, the group said:
- The tax structure and its administration do not support the features of the FMCG market.
- The policy introduces multiple taxations for each item as it travels along the distribution channel.
- High competition coupled high non-VAT compliance makes charging the VAT disincentive to the few VAT compliance firms.
Meanwhile, the Ghana Revenue Authority and the Ashanti regional minister, Simon Osei Mensah are scheduled to meet traders in Kumasi who closed their shops in protest of the current tax regime.
Citi News sources close to the Ghana Revenue Authority say efforts are being put in place to get the shops reopened.