Ghana’s Finance Minister, Dr. Cassiel Ato Forson, has called for urgent reforms to the country’s VAT system, which he deems ‘distorted’ and burdensome. With VAT rates the highest in Africa, the existing structure is seen as complex and inefficient, discouraging compliance. The government plans a comprehensive review in 2025, aiming for an equitable taxation system that eases financial burdens on citizens and businesses alike.
Ghana’s Finance Minister, Dr. Cassiel Ato Forson, has asserted that the country’s Value Added Tax (VAT) system is in a state of distortion and urgently requires reform. This assertion was made during an interview on Joy News’ PM Express following his delivery of the 2025 Budget Statement to Parliament. Dr. Forson emphasized that reforming VAT is essential to alleviate the financial burden on both ordinary citizens and businesses.
Notably, Dr. Forson highlighted Ghana’s effective VAT rate of approximately 21.9%, the highest in Africa, with Morocco following at 20%. This alarming figure underscores fundamental issues within Ghana’s VAT system. He further elaborated that the current VAT structure contains numerous inefficiencies, which complicate operational processes for both enterprises and consumers.
In his remarks, Dr. Forson pointed out that the existing VAT system’s complexity deters compliance and inflicts significant financial pressure on consumers. He maintained that the method of taxation should ideally be reconstructed to minimize burdens on businesses while preventing double taxation.
As the government is set to consult stakeholders regarding VAT reforms, the reactions of businesses and consumers will be keenly observed to assess the implications of these changes on pricing, economic activity, and tax compliance. Dr. Forson assured the public of a thorough review of the VAT system in 2025, emphasizing a transparent and consultative approach to the reform process.
This commitment marks a significant policy shift by the administration, which aims to lessen the tax burden while enhancing the efficiency of revenue collection.
In summary, Finance Minister Dr. Ato Forson has acknowledged the pressing need for reform within Ghana’s VAT system, which currently exhibits high rates and inefficiencies. His commitment to conducting a thorough review and engaging stakeholders signals a potential for significant changes aimed at improving tax compliance and alleviating financial strain on citizens and businesses. The successful implementation of these reforms could potentially enhance economic growth in Ghana.
Original Source: www.myjoyonline.com
