Former deputy finance minister accuses government of “deceit” over VAT

The former deputy minister of finance, Cassiel Ato Forson, is accusing the Nana Akufo-Addo administration of "deceit" over the abolishing of the VAT tax.

The budget, and the bill which was prepared by the government and laid before parliament seeks to abolish VAT on Financial services which includes non-life insurance and professional services in the nature of accountancy, investment and legal services.

However, Forson said the minister of Finance changed his position in parliament to exclude professional services in the nature of accountancy, investment, legal services and non-life insurance contracts from the exempted provisions.

“Simple put, it is only aspects of the VAT on financial services that have been abolished and not the entire provision,” he wrote on his Facebook Wall. “Financial services companies that perform functions like accountancy, investment, legal services and non-life insurance contracts will still be subject to Value Added Tax.”

He continued: “What saddens me is that the budget statement stated categorically that government was abolishing the entire VAT provisions on all financial services. So, why this deceit? Mr minister, who are you deceiving? Why change a policy document that has already gone through cabinet approval?”

He further accused the finance minister of inconsistencies in the reduction of the VAT rate from 17.5 percent to 3 percent.

The new Act seeks to amend the Value Added Tax regime and to mandate a taxable person who is a retailer or wholesaler for tax payable to a flat rate of 3%.

“Yet again, the inconsistencies are glaring,” he said.

“Contrary to previous commentaries by the minister of Finance during the Budget reading and debate that the government is going to give some tax relief by reducing the VAT rate from 17.1/2% to 3%, this has not reflected since a flat rate of 3% is numerically equivalent to the 171/2% VAT that allows the taxable person to net off his/her input and output VAT,” he said.