VAT Project To Publish Prices

Accra, (Greater Accra) 17 Oct.,

The Value Added Tax (VAT) Project will publish recommended prices of essential items when the new tax regime goes into effect. This is to serve as a guide to consumers and avoid the recurrence of the 1995 confusion when prices escalated as nearly every retailer slapped 17.5 per cent VAT on his or her products. The Director of the Project, Mr. Ezekiel Asamoah, said this in Accra today while answering questions at a seminar by the VAT Project for senior media personnel. Mr. Asamoah said their calculations based on current prices show that prices are expected to rise by between 0.5 and three per cent. In some cases, the prices might even come down. He said the list of companies which have been registered to collect VAT will be published in the media as another means of checking unauthorized companies from collecting illegal tax from consumers. Companies which have been authorized to collect VAT will have to display their certificates conspicuously on their premises. Mr. Asamoah said only companies which have a turnover of 200 million cedis qualify to collect VAT but added that the law allows other companies that fall below the threshold to voluntarily register for the tax. Such companies, he said, will, however, have to apply to the Project and be given the green light when found capable of collecting the tax. Mr. Asamoah warned that anybody or company which is not registered to collect VAT but does so will be prosecuted. He said in 1995 when the threshold was 25 million cedis, 10,028 companies were registered to collect VAT. This time, about 4,000 companies are projected to be registered. Asked what would happen if Parliament reduces the VAT rate from 15 per cent, he said in that case the expected revenue would reduce. Mr. George Blankson of the VAT Project repeated that VAT is not an additional tax but a consumption tax borne by the consumer. It is thus meant to replace the sales and service taxes currently in operation.