Former Director of the Institute of Statistical, Social and Economic Research (ISSER), Prof. Peter Quartey has said Ghana’s VAT system has been perfected to raise enough revenue for Government.
Speaking on TV3 NewsCentral, Thursday, July 23 ahead of the mid-year budget presentation, the Economist explained that no system has been put in place to track and monitor payment of VAT.
Ghana’s VAT rate is currently at 20% , a figure he says is higher per the African standard.
Prof. Quartey underscored the need for Ghana to reform the VAT rate and the institutions and structures responsible for collecting VAT.
“We reform the rate as well as the institutions which collect them, the structure and systems that we put in place.
“We have not perfected the system to ensure that we raise money through VAT. Therefore, you can reduce the VAT rate as much as you can but you will not rake in the needed revenue because you have not reviewed the institutions, you are not changing habits, you have not changed mindsets, you are not putting any system that will track payment of VAT and plug the holes to minimize tax evasion,” he stated.
He added: “So, I am not surprised we are not raising enough from VAT as one would have expected.”
He noted that this failure has led to many leakages in the tax system with many institutions and traders evading VAT.
“It looks like we have not reformed the VAT institution and the systems as much as we could have wished and therefore there are a lot of leakages,” he said.
