VAT Flat Rate to be operational by May

Accra, March 1, GNA - The VAT Flat Rate Scheme (VFRS) is expected to be operational by May this year, Mr Anthony E. Minlah, Commissioner of Valued Added Tax (VAT), said on Thursday.

He told a two-day seminar in Accra organised by the VAT Service for executives of the Ghana Union of Traders Association (GUTA) and other affiliate bodies of the Association to educate them on new VAT system that, although Parliament had passed the Bill the President was yet to give his accent.

Mr Milah said the system was an amendment of the existing tax law, which would expand the tax base and ensure easier record keeping, adding that it would be an easier system to operate.

Mr Anthony Ackah-Mensah, Head of Training and Development Unit of the VAT Service, said the VFRS was a marginal three percentage tax on goods to be charged by retailers and it would operate concurrently with the current invoice credit method of charging and accounting for VAT. He said all retailers of goods who were currently registered and were operating the 15 percent VAT rate scheme would be required to operate the VFRS when it became operational. "It is only those who will be authorized in writing by the Commissioner of VAT who will continue to operate the current invoice credit VAT scheme," he said.

Mr Ackah-Mensah explained that all retailers who made a daily sale of 350,000 cedis would be expected to register under the new scheme when it became operational.

He said those operating under the old system would not be re-registered but would use the old certificates with special stickers attached to them.

He said the certificates would be free and warned officers who would demand money for issuing of certificates. Mr Ackah-Mensah said manufacturers and wholesalers of goods, service providers and construction firms did not qualify to operate the system.

He advised all traders to submit returns regularly and pay the tax due at the right time and support the VAT Flat Rate Scheme.