Ghana’s Finance Minister, Dr. Cassiel Ato Forson, declared the VAT system “distorted,” calling for urgent reforms to alleviate financial burdens on citizens and businesses. He emphasized the need for a comprehensive review in 2025 to improve tax efficiency and compliance. Stakeholders are closely monitoring the proposed reforms as they could significantly impact economic activity and pricing.
Ghana’s Finance Minister, Dr. Cassiel Ato Forson, has called for urgent reforms to the country’s Value Added Tax (VAT) system, labeling it as “distorted.” This reform aims to alleviate the financial burden on everyday citizens and businesses. During his interview on Joy News’ PM Express on March 11, Dr. Forson conveyed that restructuring the VAT is vital for improving tax efficiency within the nation, especially following his recent presentation of the 2025 Budget Statement to Parliament.
Dr. Forson highlighted that Ghana’s effective VAT rate stands at approximately 21.9%, the highest in Africa, showcasing a stark comparison to Morocco’s 20%. He elucidated that the VAT structure suffers from several inefficiencies, creating complications for both consumers and enterprises. “The VAT rate itself has been distorted… sales tax has been mixed with Value Added Tax,” he elaborated, referencing the existing inconsistencies.
The complexities of Ghana’s VAT framework have been criticized by various experts, who argue that it deters compliance and imposes financial stress on consumers. As the government prepares to consult stakeholders regarding the proposed VAT review, both businesses and consumers are keenly observing potential impacts on pricing and economic activities.
Dr. Forson stated that the current VAT system hinders economic growth due to its inefficiencies as a consumption tax. The Finance Minister reassured the public that a thorough review of the VAT system is committed for 2025, with an emphasis on a participatory approach. His statements reflect a shift in policy by the Mahama administration towards reducing tax burdens while enhancing revenue collection.
In conclusion, the Finance Minister, Dr. Cassiel Ato Forson, identifies the urgent need for reforming Ghana’s VAT system, emphasizing its current distortions and inefficiencies. The commitments laid out for a comprehensive review process in 2025 highlight a significant policy shift aimed at alleviating financial burdens on citizens and improving tax compliance. Stakeholders watch closely as this initiative could redefine the fiscal landscape in Ghana.
Original Source: www.myjoyonline.com
