The Ghana Revenue Authority (GRA) says recent reforms to the Value Added Tax (VAT) system is easing cost pressures on consumers, with an estimated GH¢6.5 billion effectively returned to households following a drop in prices.
According to the Authority, the prices of goods and services have declined by about 1.9 per cent since the reforms took effect, driven by a reduction in the effective VAT rate to 20 percent and the removal of the COVID-19 Health Recovery Levy.
Speaking during a VAT compliance monitoring exercise at shopping malls in Accra’s Spintex enclave, the Commissioner-General of the GRA, Mr Anthony Sarpong, urged businesses to voluntarily comply with the revised VAT framework and called on consumers to demand VAT invoices to support enforcement.
Mr Sarpong said the monitoring visits were aimed at verifying the practical implementation of the reforms across the retail sector.
“We visited a number of shops to see firsthand how the VAT reforms are being implemented,” he said. “This is a comprehensive reform that has reduced the rate, abolished the COVID levy, removed the coupling and increased the threshold for smaller businesses.”
He noted that the Authority was satisfied with the level of compliance observed so far, adding that the shops visited had reconfigured their systems to apply the new VAT rates.
Mr Sarpong said interactions with shoppers during the exercise showed growing consumer satisfaction with the price reductions, reinforcing government projections that the reforms would leave more disposable income in the hands of Ghanaians.
“The feedback from consumers affirms what the Minister of Finance announced that the VAT reforms are effectively putting over GH¢6.5 billion back into the pockets of households,” he said.
The GRA Commissioner-General stressed that sustained compliance by businesses and responsible behaviour by consumers were essential to mobilising revenue for national development, in line with the economic agenda of President John Dramani Mahama.
“When businesses comply and consumers demand their VAT invoices, we generate the revenue needed to support growth, job creation and transformation,” he said, urging all Ghanaians to play their part in the tax system.
Meanwhile, management of shopping malls visited in the Spintex area, including Palace Mall, Melcom, Orca Décor, United Commercial Trading and Palace Home Décor confirmed that their payment systems had been recalibrated to reflect the new VAT regime.
Several customers at the outlets also expressed satisfaction with the reduced prices, noting the absence of the COVID-19 levy on their receipts.
