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Business owners in Ashanti Region want 3% flat VAT deducted from entry source

The Ashanti Business Owners Association (ABOA) is calling on the government to either scrap the 3% flat rate Value Added Tax (VAT) system or deduct it the entry source of goods.
The government announced the tax as part of tax component of last year's budget.
The Business owners, who deal predominantly in fast moving consumables, say their operations are negatively being impacted by the VAT.

General Secretary of the Association, Mark Osei Boakye, says members sometimes at a loss because they are compelled to reduce prices in a bid to clear the goods.
“The price reduction is sometimes caused by the need to pay urgently one's creditors and or [clear them] because stocks have a short shelf life...businesses in this industry have a long distribution chain which could be up [the flat VAT rate] four or five times before a product gets to the final consumer," Mr. Boakye said.
Coupled with this, the business owners in the Ashanti Region observe with worry that most traders on the market are not VAT registered, and even most registered ones have little or no knowledge in the VAT system.
Mr. Osei Boakye is worried the tax puts a strain on their operations and has therefore created unfair playing field which is affecting compliance.
“Businesses that registered are experiencing a drop in sales because when the rate is charged on the product it shoots up the price whereas the unregistered businesses have same products at a reduced price because they do not charge the 3% rate. We are unable to trade among ourselves since we all are unable to sell at the same price,” he said.
This comes at a time the finance minister is about to deliver the 2018 financial budget.
The leadership of the Association, therefore, suggests the 3% be charged by the government at the manufacturing sources and/or point of entry.
The Association is convinced that will also create a level playing field for every trader and in the long term support the nature of the business to enhance their growth.

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