Vice President Kwesi Amissah-Arthur on Friday said the acquisition of affordable houses must be covered by the Value Added Tax, (VAT).

He said those who can afford the houses should equally pay the required tax.

The Vice President said this during a crunch dialogue meeting at the Flagstaff House in Accra between the government and the Ghana Real Estate Developers Association (GREDA), over the association's petition for an exemption of VAT on the sale of houses.

The dialogue, which was necessitated following the association’s petition to the government, was to find an effective way of taxing the industry while ensuring that the efforts by government and the private sector to collaborate in closing the housing deficit, was not hindered.

The meeting was attended by Mr George Blankson, Commissioner-General of the Ghana Revenue Authority and tax advisors from the Ministry of Finance, on one side, and GREDA Executives on the other side, where they considered the merits and demerits of the VAT on housing sale.

Previously, the sale of houses was exempted from VAT, but real estate developers paid the general taxes on the purchase of building materials.

In its petition, GREDA indicated that the extension of the 17.5 per cent VAT rate to cover the sale of houses has shot up the prices of houses astronomically, which is negatively affecting the housing industry.

But the Vice President, after listening to the explanations from the GREDA executives, said he did not believe that an exemption of houses from the VAT was the best.

On the GREDA’s argument that the imposition of VAT would hinder efforts to provide affordable houses, Vice President Amissah-Arthur noted that although the association’s concern were legitimate, there should be other ways of partnering with government to support the affordable housing agenda.

“Let’s discuss and encourage those who can pay for the houses, and find ways of providing affordable house to those who cannot afford,” he said.

The Vice President assured the association of government’s continued support, saying the government remained committed to involving GREDA in its various housing projects towards addressing the housing deficit in the county.

“We need solutions that would address the fundamental problems in the housing sector,” he said.

Earlier before the meeting went into closed-doors, Mr Kwakye Dopoah-Dei, President of GREDA, thanked the Vice President for the attention given to their petition.

He indicated that although they were not against measures to expand the tax net, there was a need to re-examine the VAT on housing sale.

He said the association has also proposed the setting up of a housing commission to regulate the operations of the real estate industry to ensure that operators conformed to best practices.

According to him, the association has been controlling its members to practice in line with regulations, adding that, many other operators, who are not members of GREDA, continue to engage in improper activities that tarnish the image of the industry.

In another development, the Vice President on Friday inaugurated a 40-seater ICT and reference library and 10 motor bikes for the Ghana National Fire Service Training School at James Town Beach in Accra.

Vice President Amissah-Arthur assured the Service of support to acquire new technologies and skills in fire-fighting.