The Ghana Revenue Authority (GRA) will start the imposition of an upfront 12.5 per cent Value Added Tax (VAT) on the customs value of taxable goods at all ports of entry with effect from Tuesday, June 6, this year.
The development will affect importers of taxable goods who are not registered to charge VAT.
It is applicable to taxable goods imported into the country for home consumption, taxable uncustomed goods forfeited and auctioned and taxable goods on transfer from bonded facilities.
It means importers of taxable goods who are not registered with the authority for tax will pay the upfront VAT in addition to the import duties and other taxes on the total value of the goods imported.
It follows the amendment of the VAT Act, 2013 (Act 870) which imposed the upfront payment of VAT by unregistered importers as an administrative measure to enhance the performance of VAT.
These came to light when the GRA engaged media practitioners on the implementation of the 12.5 per cent upfront payment in Accra last Thursday.
The Commissioner of the Domestic Tax Revenue Division of the GRA, Edward Gyambrah, explained that the move was “a compliance tool and not a new tax”.
He stated that all those who were tax compliant would not be affected.
Ahead of the implementation of the amended law, the Commissioner said the GRA had engaged various stakeholders, including the Ghana Union of Traders Association (GUTA), the Association of Ghana Industries (AGI), the Institute of Freight Forwarders and the Custom Brokers Association of Ghana, among others.
Mr Gyambrah further stated that the law which was passed in 2020 was aimed at ensuring parity in the pricing of goods on the market to ensure fairness, as VAT registered taxpayers charged the tax on their imported goods on the domestic front.
A member of the technical committee for the implementation of the Upfront Payment of VAT, Wiseborn Koranteng, said persons who failed to apply for registration were liable to a penalty of not more than two times the amount of tax on taxable supplies payable from the time they were required to apply for registration until they filed an application for registration with the Commissioner General of the GRA.
He added that persons liable for the payment of upfront VAT included importers of taxable goods who were required to register for VAT, but who had failed to register.