Modern Ghana logo

FEATURED: [trailer] Anas To Drop Shocking Video On Children At Orphanage Eating ...

19.04.2006 General News

VAT reduces qualifying threshold for exporters


Traders, who export at least 25 per cent of their total supplies, are to qualify for VAT refund, to enable them to compete effectively and generate more foreign exchange for the country.

The initiative by the VAT Service is an amendment to Act 546 of the VAT Law (1998), which made provisions for only traders, who exported 70 per cent of their total supply to have access to refund. Mr Samuel Gyakye-Smith, Head of Operations, VAT Service, who made this known at a seminar to educate exporters in Accra, said under the new amendment, 25 per cent of sales should be exported within the accounting period with proceeds repatriated to Ghana.

"Persons exports should exceed 25 per cent of the total supplies within the accounting period and the total export proceeds have been repatriated by the importers bank to the exporters authorised dealer bank in Ghana", he said.

He said with the new development, there would be a risk in tax evasion, and the Service had, therefore, put in place measures to ensure that all export proceeds should be within the country's banking system. "Another implication is the extra burden on the Vat Service, because in the short-term, we would have huge refund claims, and therefore the need for credibility check", he said.

Mr Smith underscored the need for exporters to submit all export documents and VAT invoices and to pay all previous returns to qualify for the refund.

He mentioned other requirements as being in the credit position for at least three months, and registered with the VAT Service. Mr Smith noted that some difficulties might persist in instances such as securing appointment, identifying illegal claims, relocation of exporter's offices and advised the traders to co-operate with the Service.

Some exporters welcomed the amendment as good news and an initiative to boost their morale for competitive export.