Retail industry players divided over reintroduction of VFRS

Players in the retail industry are split over government’s decision to reintroduce a three per cent Value Added Tax Flat Rate (VFRS).

The disagreement followed a meeting with the Finance Committee of Parliament in Accra yesterday.

Whiles the Ghana Union of Traders Association (GUTA) argued that the reintroduction will not result in price hikes, the Food and Beverages Association of Ghana said the move would result in price increases.

The tax, described as consumptive tax, has got tongues wagging with fears that prices of goods could rise in the coming days.

The fears followed a circular issued by the Ghana Revenue Authority (GRA) that advised all retailers, wholesalers, including importers to start implementing the tax.

Addressing the media, however, after yesterday’s meeting, president of the GUTA, Barima Dr Ofori Ameyaw said the tax had been operational during the erstwhile Kufuor administration which has transcended the eight years of the outgone NDC government and that there was no cause for alarm.

He said the tax which was removed about a year ago by the John Mahama-led administration was replaced by the 17.5 VAT.

“GUTA agitated that it was brought back because it was the simplest system by which traders who can’t compute the input and output as a result of the 17.5, so that we can pay the three per cent which is the simplest form of paying the tax,” Dr Ofori Ameyaw stated, adding that “GUTA and the traders are happy that the three per cent has been brought back.”

He said after the system had been in existence for more than 10 years, there has not been any cascading effect on the consumer and same would be the case with the reintroduction of the new tax regime.

He debunked claims that the reintroduction would lead to price hikes, categorically saying that “this will lead to price reduction on goods and services on the market.”

Secretary of the Food and Beverages Association of Ghana (FBAG) maintained the move would result in price increases.

“If they say they want to continue what they want to do, we have no choice but to pass on the cost to the consumer,” secretary of the association, Mr Samuel Ato Aggrey, told journalists in Parliament yesterday, expressing disappointment with the attitude of GUTA.

He said as a union which must protect the interest of consumer, were rather supporting government in the reintroduction.

By Julius Yao Petetsi

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