IMANI: Exempt agri-businesses from VAT

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Policy think tank IMANI Ghana, in a joint publication with Atlas Network, has suggested to government to promote local businesses by excluding local producers from the payment of Value Added Tax (VAT) on their products.

According to suggestions in the report, the governing National Democratic Congress (NDC) “should take concrete steps to enforce its decision to remove VAT on locally-produced goods and raw materials as part of its policy to support local industries”.

“This policy should be expanded to include other sectors, particularly agri-business,” it added.

The authors of the report believe such an initiative will boost local production and provide an incentive for more agro-based businesses to flourish.

In their publication, the two organisations also recommended that “any other subsequent tax policies should seek to achieve tax efficiency and equity, and not just increase tax rates”.

According to them, there was a need to introduce policies that allowed for the progressive formalisation of the large informal sector, using simplified and technology-powered regulatory systems in terms of business registration and tax compliance.

They attributed government’s failure to mobilise revenue, to the huge informal sector in the country, which they believe makes up about 80% of Ghana’s economy.

They were of the conviction that efforts to formalise this sector would provide government with the ability to efficiently gain taxes from the sector.


Source: ClassFMonline.com

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