GUTA blames price increases on VAT standard rate policy

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The Ghana Union of Traders Association (GUTA) is blaming recent price hikes of basic items on government’s decision to force some retailers to pay VAT standard rate.

According to GUTA, the new policy is retrogressive and compels consumer to go through double taxation.

The new policy imposes a flat levy on businesses operating below five hundred thousand threshold. Retailers above the threshold are made to pay VAT standard of 19.25 percent.

Speaking to Joy Business, GUTA President, Joseph Obeng said all attempts to get government to change the policy to bring some relief to Ghanaians have not yielded any results.

“This policy only compounds the burden of consumers. The manufacturer pays the VAT, when it gets to the distributor, he also charges the VAT. So the VAT charges goes on through the wholesaler to the retailer. The VAT is on all players in the channel”, he lamented.

Mr. Obeng stated that traders have no other option but to pass on the cost to consumers.

Recounting many attempts to get government to repeal the policy, Mr. Obeng said the Finance Minister has decided not to consider any recommendation from GUTA.

“We have tried many times to let government and the Ghana Revenue Authority to understand that the VAT standard rate on traders is not fair. We tried convincing government before the Mid-Year budget but the Finance Minister didn’t listen to us”.

He argued that the policy could be part of the contributors of high inflation in the country.

“Just look at how prices are going up. Inflation is now at 37.2 percent”.

“I have always said that this high inflation we are currently facing in the country is partly due to this policy,” he added.

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