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12.10.2006 Business & Finance

VAT Service to introduce flat rate scheme

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The Value Added Tax (VAT) Service will introduce a flat rate scheme to force unregistered businesses to register and pay tax by the close of the year.

The document to enforce the flat rate scheme is currently before the Revenue Agencies Board and will require the VAT Service to register businesses with yearly turnover of 200 million cedis to a maximum of 1.2 billion cedis when it becomes operational.

Mr. Anthony Ewereko Minlah, the new VAT Commissioner, told journalists in Accra that the scheme forms part of interventions to widen the tax net and to collect more revenue for development.

He said the VAT Service is working hand-in-hand with the Ghana Union of Traders' Association for education purposes to ensure voluntary compliance with registration and collection of the tax.

The Service is also embarking on various programmes to educate personnel to enhance skills for enforcement purposes.

This action would also empower the unit of the Service to make regular visits to VAT registered businesses to determine those who are complying with the rules.

Meanwhile the VAT Service has issued a warning to Ministries; Departments; Agencies (MDAs) and Metropolitan; Municipal and District Assemblies (MMDAs) to purchase all items from VAT registered business without which the nation loses a big chunk of revenue.

According to Mr. Minlah, the notice to the organizations is to enable the Service to cooperate with and partner them for the collection of VAT.

”The MDAs and the MMDAs are responsible for a big chunk of expenditure,” Mr. Minlah said, and added that it is necessary for them to purchase taxable goods with registered businesses in order to channel resources into government coffers.

He said when the Service forms a partnership with government agencies it would also be easy to monitor compliance with the laws and rules of the tax system.

The Commissioner said the VAT Service is collaborating with the Accountant-General and Auditor-General Departments to access their databases and match the information on taxpayers with what it has to ensure the success of the new programme to widen the tax net.

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