Tax payers educated on VAT flat rate in Yendi



The Ghana Revenue Authority (GRA) on Tuesday organised a one day sensitisation seminar on the Value Added Tax Flat Rate Scheme (VFRS) for traders and other institutions in the Yendi Municipality.

The topics treated included VAT Flat Rate Scheme (VFRS), Revenue Administration ACT, 2016 (ACT 915), and types of Tax Relief among others.

The Yendi Municipal Chief Executive (MCE), Alhaji Mohammed Abubakar Yussuf said there is the need to sensitize and educate the public on the importance of meeting their tax obligation.

Alhaji Abubakar said the public need to know the importance of paying tax to ensure that they honour their tax obligation.

He said, it was the responsibility of all citizens to help create the awareness about the importance of tax payment.

Alhaji Abubakar commended the Yendi Small Tax Office (STO) for holding the seminar and expressed the hope that people would honour their tax obligation.

Mr. Stephen Adomah, Manager of Yendi Small Tax Office, said one of the aims of GRA was to promote tax compliance through tax education programmes.

He said one important thing that traders needed most was record keeping of their income and expenses to enable them assess their progress.

Mr. Adomah reminded them on the need to file monthly or annual returns to avoid penalties imposed on them.

Speaking on VFRS Mr. Erasmus Ayenor Tei, Senior Revenue Officer from the Tamale Medium Tax Office, said VFRS is a VAT collection and accounting mechanism under which a registered Taxpayer who is a retailer or wholesaler of goods applies a marginal VAT and National Health Insurance Levy (NHIL) rate of three percent representing the net VAT payable on the Value of taxable goods supplied.

He said the VFRS is restricted to wholesalers (including importers) and retailers of taxable goods and does not cover manufacturers, and service providers among others as provided in section 3(2) of VAT ACT) 870 as amended by VAT (amendment) ACT, 2017 (ACT 948)

Mr. Tei said VFRS covers the supply of all taxable goods, except the supply of any form of power, heat, refrigeration or ventilation section 1 (b) of VAT (amendment) ACT, 2017 (ACT 948).

He said wholesalers including importers and retailers of taxable goods who are currently registered to operate the Standard Rate Scheme (SRS) are to be automatically converted to VFRS.        

Mr. Ayenor said the VFRS applies a marginal tax percentage of three per cent on the value of taxable goods supplied.

He said the marginal tax percentage represents the net VAT rate on the value of the taxable goods supplied and that the VFRS does not therefore allow recovery of input tax.

Mr. Victor Kwame Jiagge, Senior Revenue Officer, speaking on Revenue Administration ACT 2016 (ACT 915), said the taxpayer Identification Number System applies to the GRA, Controller and Accountant General’s Department, Registrar General’s Department, Banks, Insurance Companies and other Financial Institutions and any other institutions or persons whom the Minister may by Regulations prescribe.

He said for failing to maintain proper records as required by tax law, a person is liable to pay a penalty for each month or part of the month, during which the failure continues

GNA/GBCONLINE