NPP says no to VAT

THE New Patriotic Party (NPP) has said it opposes the re-introduction of the Value Added Tax (VAT) system because the conditions that made it unworkable in 1995 still exist. In a statement issued at the weekend, the party said the unbearable economic conditions of 1995 have not improved, claiming that the average Ghanaian is worse of today than he was in 1995. The statement noted that the reintroduction of VAT in January 1998 or in the near future will exacerbate the inflationary presence on the economy, create further macro-economic instability and compound unemployment situation in the country. The statement, signed by the party's General Secretary, Mr Joseph Agyenim Boateng, said further that the reintroduction of VAT threatens the viability of small and medium scale industries. It explained that the operations of VAT will require tremendous record-keeping and information management on the part of VAT registered firms. This, the statement claimed, will put additional cost on business operations and small and medium scale businesses would find it difficult absorbing the extra cost. The statement said even though VAT would increase the revenue base of the country, it cannot guarantee that this would be effectively utilised. The NPP said the only cure for Ghana's macro-economic instability is fiscal prudence which, it said, VAT cannot provide. "The success of VAT in our current situation would not be determined by the amount of revenue raised but by the degree in which the revenue so generated promote economic growth" it said. The statement called on the government to initiate new, innovative and bold policies to strengthen and expand the economic base of the country and not to resort to constant imposition of new taxes as the only credible alternative to dealing with fiscal imbalances.