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16.12.2005 Business & Finance

Traders not to give VAT on credit

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Accra, Dec. 16, GNA - Traders who are registered to charge Value Added Tax (VAT) but give credit to their customers must collect the tax before granting the credit facilities.

On the other hand, the traders can give the credit including the VAT aspect as long as payment to the VAT Service is not due, Mr Ken Bentsi Enchil, a Deputy Commissioner of the Service in Charge of Research, Monitoring and Compliance, said on Thursday.

Mr Betsi Enchil, who was answering questions when the Service interacted with traders at Tema, said it was not right for traders to give what was due the Government on credit, therefore, the Service would not succumb to pleas of businesses that constantly made pleas that their goods had been bought on credit and should be given some time to pay the tax.

The majority of the traders, who attended the interaction, had requested the Service to be lenient with them when its officers went round to collect the tax since their goods might have been purchased on credit.

But the Deputy Commissioner said the Government's share of the sale of goods and services should be a priority of every transaction and, therefore, should not be given on credit. This was because nobody had been given the authority to give Government's money on credit. Mr Joseph Odartey-Blankson, Commissioner of the Service, told the traders that VAT officers needed to be aggressive because of the nature of the work.

There had been a complaint about the way and manner in which the officers harassed traders when they went to check their books and to ensure that the returns and amounts due were in consonance with transactions made in particular months.

The Commissioner in explaining the reason and need for the stance said: "We are in business together and it requires dedication from both of us but there are some times when we need to apply the carrot and the stick to get results."

Mr Victor Ampah, Head of Public Affairs Directorate, in answer to complaints about irregular checks and interactions with the traders, said the Service did not have enough staff to undertake such regular checks.

He said the VAT Service had staff strength of less than a 1,000 and operational staff of less than 600 while the total registered traders numbered 28,000.

Ms Nanzirata Azumi Duwiyua, Acting Head, Tema Vat Office, explained VAT's expectations to the traders, mentioning areas such as what constituted non-deductible input tax, who was entitled to refund and compliance and surveillance.

She told the GNA that the Tema Office had about 3,000 registered traders in its books. However, he said, some of them did not file their returns but wanted to be reminded all the time.

She said that others also filed their returns but would not pay the monies under the pretence that they did not understand the law. The Service must, however, audit the books of the traders, who were entitled to credit to reconcile the figures before refunds could be made, she said.

The meeting was the second in a series being organized by the Service to find out the problems of the traders and also to explain the areas they did not understand.