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VAT Service sensitive to the poor -
Minlah
Accra, Feb. 2, GNA - Mr Anthony Minlah, Commissioner of the
Value Added Tax (VAT) Service, on Friday said that the
Service was sensitive to the plight of the poor hence
exemption of taxes on education, health and agricultural
equipment to make such services affordable.
Mr Minlah was speaking at a day's workshop organized for the
media and small and medium scale enterprises (SMEs) to
educate them on the activities of the VAT Service and
upcoming Flat Rate Scheme (FRS).
The VAT Flat Rate Scheme is an accounting mechanism that
applies a marginal tax percentage payable on the value of
taxable goods supplied.
Under the FRS, three per cent of tax would be charged by
traders on their taxable supplies as an alternative to the
invoice credit method of VAT accounting.
Mr Minlah explained that the FRS would be restricted to a
specified sub-sector within the retail distribution defined
by levels of turnover with the target being the informal
trading sector.
He said traders with a threshold of less than 100 million a
year would not be included in the FRS which had been
designed to address identified compliance problems with
retailers of goods.
"All enterprises, irrespective of size, will have to meet
the same threshold for registration; file returns with
payments; are subjected to control and verification visits;
apply the same VAT rate and suffer the same penalties for
non-compliance with provisions of the VAT Act."
He said the FRS was going to ensure compulsory registration
of SMEs, creating a level playing field and would increase
fairness and competitiveness in the tax system.
Mr Minlah said registration for VAT would improve businesses
outlook of micro and small scale enterprises, adding that
the requirement to issue invoices and keep basic records
would compel SMEs to improve their record-keeping culture.
"Creating an enabling environment for SMEs to be part of the
engine of growth depends on inflows through taxes and loans.
It is in the absolute interest of the VAT Service to assist
growth of businesses," he said.
He said ensuring compliance was an on going challenge, which
required public education and strong client focus.
He commended SMEs that paid their VAT voluntarily and while
encouraged a high level of voluntary compliance.
GNA
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