Tax removal will boost spare parts business — Ali Nakyea
A tax expert and Managing Partner of Ali-Nakyea and Associates, Mr Abdallah Ali-Nakyea, has observed that abolishing taxes on imported spare parts will lead to increased sales.
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Increased sales should boost the businesses of the traders and that will ultimately improve economic growth.
As a result, Mr Ali-Nakyea has asked the government to be diligent in tracking revenue inflows to the spare parts dealers to help ensure that the country benefits from the anticipated boom.
He was speaking on the theme: ‘Interconnection of illicit financial flows, tax governance and public service’ to commemorate the International Public Services Day in Accra over the weekend.
The event was organised by the Ghana Integrity Initiative (GII), the International Tax Justice Network (ITJN) and the Public Services International.
Cascading
Mr Ali-Nakyea also urged the government to withdraw the Value Added Tax (Amendment) Bill, 2017, to reflect on it some more and repackage it better.
He said if that was not done, it would lead to inflation in the prices of prices of commodities.
Explaining further, Mr Ali-Nakyea said the introduction of the flat rate would lead to the tax being placed on goods right from the factory level to the point where it reached the consumer.
He argued that that would result in a cascading rise in prices at each point of the distribution chain, resulting in price hikes that could make life difficult for Ghanaians.
He said the law on the flat rate had been passed without considering the thresholds of various economic activities.
“The income tax laws of the country consider the thresholds of incomes across the country. The flat rate is the only law passed without a consideration of thresholds,” he said.
Context
The Value Added Tax (Amendment) Bill, 2017, would require all taxable retailers and wholesalers to account for the VAT at a flat rate of three per cent.
The amendment was taken through a certificate of urgency and passed in April, this year.
It seeks to amend the Value Added Tax Act, 2013 (ACT 870), to classify the supply of financial services, domestic transportation of passengers by air and supply of immovable property by a real estate developer as exempt supplies.
The implementation was, however, deferred till May by the Ghana Revenue Authority (GRA).
Like the flat rate, the exemption of taxes on the importation of spare parts was captured in the 2016 budget. — GB