The Ghana Union of Traders Association (GUTA) has reiterated the need for government to strengthen the structural operations of the Valued Added Tax (VAT) to enhance compliance.

The advice follows the implementation of the increase in the VAT rate from 12.5% to 15%, effective January 1, 2023.

Speaking to Joy Business, President of GUTA, Dr. Joseph Obeng cautioned that increasing the rate without improving compliance may not yield the targeted results.

He pointed out that the current state of the VAT laws imposes hardship on businesses, particularly retailers.

“The increase in VAT is going to bring some discomfort to businesses”.

Mr. Obeng cited an example where the current nature of the VAT implementation system resulted in the opposition by traders in the Ashanti region, where the traders refused to cooperate with the Ghana Revenue Authority (GRA) officials.

“You recall that our members in Kumasi embarked on demonstrations against the invigilation by the tax officers on the VAT simply because of noncompliance,” he said.

“The structure itself is very complex and it does not ensure compliance and that is why we are thinking that government should have looked into reforming the structure so that it will ensure compliance rather than increasing the rate”, he added.

Expressing his disappointment, Dr. Obeng maintained that the GRA should have engaged key stakeholders before encouraging government to announce the increment in the VAT.

According to him, there is the need for government to engage players in the informal sector, who are generally traders.