The leader and Founder of the Liberal Party of Ghana, Kofi Akpaloo has indicated that Ghanaian businesses would be faced with hardship in the coming months.
This according to him is as a result of the introduction of a “7% VAT withholding tax” effective today October 1 by government.
Mr Akpaloo alleges that government would introduce this in addition to the already existing 8 % tax and has stated that government is on a suicide mission if the policy is implemented.
“In fact, this government is on a suicide mission. I am highly informed that from October 1, this year, government will introduce VAT withholding which is going to be 7% in addition to withholding tax which is already 8 %. This introduction is outrageous. Government should rethink this decision or it will frustrate the people” he stated.
He lamented that the consequences will not be good for Ghanaian businesses especially contactors and appealed to government to tread cautiously with the implementation of the new “Withholding VAT” policy.
He was speaking in an exclusive with allnewgh.com and explained that Ghana does not have a tax refund system, where citizens who over pay taxes are refunded and noted that implementation of the withholding VAT would have been successful if the system practices the tax refund system.
Mr. Akpaloo said that there will be a significant effect on the cash flow of businesses and said that businesses would suffer in the end drastically.
“Businesses are borrowing and paying interest and this initiative will cripple the economy and I will say to government that they should not try at all”, he stated.
He said there are several foreseen challenges when the policy is initiated and called on government to rethink the decision to avoid further hardship on the economy.
He suggested that government should rather design a proper tax administration system to get people to comply with the payment of taxes.
He noted that the voters’ register is the best database to be used in bringing citizens to book in the payment of taxes, as it has information of almost 90 % of citizens who are of tax payable age in the country.
He added that the voters’ register can be used to identify all eligible workers and made to comply to fill tax instead of using the TIN number system where people have to register all over again at the expense of the state.