VAT Service takes measures to consolidate tax
Credit Union to take action against loan defaulters
Timber industries to import timber
Accra (Greater Accra) 14 March 2000
The
Customs, Excise and Preventive Service (CEPS) on Monday appealed to the
government to review the current system of collecting and accounting for import
Value Added Tax (VAT) and excise duty saying that the system is ineffective.
Under the current arrangement, the VAT
secretariat collects excise duty from selected domestic industries such as the
brewery, mineral water and tobacco companies, but CEPS accounts for that tax at
the end of every financial year.
On the other hand, CEPS collects import
VAT for which the VAT secretariat accounts.
In
an interview with the Ghana News Agency (GNA) in Accra, Nii Adjei Okine
Commissioner of CEPS, deplored the arrangement initiated last year, saying that
it is adversely affecting the revenue mobilization levels under the CEPS.
CEPS revenue collection performance for
1999 made available to the GNA indicates that CEPS exceeded the over 300
billion cedis import VAT target of the VAT secretariat by about 60 per cent.
It collected 517.848 billion in 1999 but
the VAT secretariat on the other hand failed to meet the excise duty target of
CEPS.
Out of the 200 billion cedis CEPS excise
duty target for 1999, the VAT secretariat was able to raise only 168.816
billion for CEPS, which indicate a 15.6 per cent shortfall.
Meanwhile 1998 CEPS revenue collection
performance list indicates that CEPS collected 161.628 billion cedis excise
duty out of its 180 billion cedis target for that year, showing a 10.2 per cent
shortfall only. CEPS collected close to 1.5 billion cedis import VAT for the
VAT secretariat that same year.
Nii Adjei said he suspected lack of
motivation and proficiency on the part of the VAT officials for the huge
shortfall in the 1999 excise duty mobilisation, saying; "since they do not
account for excise duty, they seem not to be eager about increasing its
collection."
The
management of CEPS has, therefore, requested their board of directors to seek
either a reverse or a review of the system to ensure accurate collection and
accounting of the two taxes.
"We are currently seeking a situation
where we either collect and account for all international taxes including
import VAT, while the VAT secretariat collects and accounts for all domestic
taxes, or we collect and account for domestic excise duty, while the VAT
secretariat collects and accounts for import VAT."
The Commissioner noted that the current
arrangement has reduced the revenue base of CEPS, saying that since the
introduction VAT, import and domestic sales taxes, as well as special and other
taxes which formed part of the revenue base of the CEPS until last year, have
all been abolished.
He said due to this situation, 1998
revenue collected by CEPS, which stood at 1,985,722.94 million cedis including
about 1.5 billion cedis import VAT, exceeded that of last year which was
1,911,488.63 million cedis, including over 500 billion import VAT.
Nii Adjei, however, noted that due to
the recent crisis in the prices of cocoa and petroleum, the two commodities
performed poorly in terms of tax, which consequently contributed to the rather
below expectation performance of CEPS revenue collection.
While cocoa recorded 219.930 billion cedis
in taxes, out of a target of 356 million cedis for 1999 (a short fall of
136.069 billion cedis), petroleum tax fell short by 43 billion cedis, recording
416.998 billion cedis out of 460 billion cedis target for the same year.
Meanwhile, actual import tax for 1999 of
587.895 billion cedis, exceeded the target of 578 billion cedis by just a
little below two per cent.
The Commissioner said the government's
projected target for CEPS as in this year's budget, is 1.767 trillion cedis.
Out of this, 720 billion cedis is expected from imports tax, 160 billion from
cocoa tax, 644 billion from petroleum tax and 243 billion from excise duties,
which is still under the VAT secretariat.
He said CEPS has put effective measures in
place to prevent tax evasion in order to realise the target.
They
include computerization tax and warehouse regimes, modernisation
administration, stringent post and pre-audit verification as well as effective
checks at the various entry points.
Nii
Adjei, therefore, urged the government to keep its macro-economic and fiscal
policies on track to ensure the stability of the cedi, inflow of foreign
exchange needed to boost both cedi-based and foreign exchange-based imports, as
well as the protection and growth of local industries.
GRi.//
Accra
(Greater Accra) 14 March 2000
The
Value Added Tax (VAT) Service on Monday said it has started a series of
meetings with lotto operators and distillers of local gin as part of efforts to
consolidate the tax.
Mr George
Blankson, Deputy Commissioner of Operations, told the GNA in an interview that
the programme is also meant to smoothen out rough edges in the second phase of
the implementation of the tax.
The
meetings will enable the Service to review the procedure by which the lotto
operators and distillers charge the tax to ensure greater effectiveness of the
new tax system.
Mr
Blankson said prior to the meetings, the distillers charged prices below the
normal market value of their products.
As
a result, the distillers under-declared the tax.
It
is expected that after the meetings, the Service would exercise proper control
and monitoring measures to be able to ensure that the distillers do not issue
their own invoice and that they declare their actual turnovers.
Mr
Blankson said it would also enable the Service to dialogue with the lotto
operators and afford the latter the opportunity to appreciate the need for a
change in their mode of operation.
The
Service would among other issues discuss new guidelines with the lotto
operators - the main thrust of the new guidelines is that all lotto operators
must issue printed coupons from the VAT Service beginning from 1 April.
"We
expect them to comply with the rules voluntarily after our meetings with
them."
Mr
Blankson explained that the guidelines would eliminate illegal lotto operators
in the industry due to their inability to issue VAT coupons to their customers.
He
said the Service would offer incentives to customers who report both legal and
illegal lotto operators who do not issue VAT coupons.
GRi./
Accra
(Greater Accra) 14 March 2000
The
Ghana Stock Exchange All-Share Index went flat on Monday after its dramatic
performance last week when it gained 12.35 points.
The GSE All-Share Index went down by 0.15
points during trading that saw two losers and no gainer.
The change for the year slipped to 2.39
per cent from 2.41 per cent.
Aluworks Limited lost two cedis at 2,487
cedis while British-American Tobacco lost three cedis at 460 cedis, its second
successive loss.
Last week's gains were on the back of
three heavyweights - Standard Chartered Bank (SCB), Ghana Commercial Bank (GCB)
and SSB Bank - but these equities were relatively quiet on Monday.
There was no bid or trading in GCB
although bids were 6,500 while only 200 shares were demanded and sold in SCB
with offers being 1,700 shares. SSB Bank also sold only the 3,100 shares
demanded although 20,800 were offered.
There was again no bid for AGC shares,
although 1,500 shares were posted.
Total shares traded on the bourse were
43,100, up from 22,900 while bids were also higher at 81,100 shares compared
with Friday's 65,100.
Offers remained far ahead of bids at
588,800 compared with Friday's close of 732,360.
Market capitalisation slipped at 3,233.07
billion cedis from 3,233.31 billion cedis.
The following are the last prices of
listed equities in cedis:
ABL 470
AGC 18,700
ALW 2,487 -2
BAT 460 -3
CFAO 40
EIC 1,880
FML 935
GBL 1,450
GCB 835
GGL 974
HFC 762
MGL 200
MLC 150
MOGL 14,500
PAF 294
PZ 800
SCB 19,500
SPPC 150
SSB 1,998
UNIL 1,848
UTC-E 125
CMLT 421
GRi./
Dorm
Ahenkro (Brong Ahafo) 14 March 2000
Members
of the Chance Brothers Credit Union at Dormaa-Ahenkro have resolved to take legal
action against members who have defaulted in the repayment of loans granted
them.
The
decision was taken at an emergency meeting of the union at Dormaa-Ahenkro
yesterday.
According
to them, the capital base of the union is being watched closely and express the
hope that the move would help retrieve the loans to enable the union perform
effectively.
In
order to ensure prompt payment of the loans, members also appealed to the loans
committee to see to it that those granted loans have the requisite collateral
security.
Mr
Albright Opoku-Kyeremeh, Secretary of the Union announced that the capital base
of the union was 122 million cedis as at December 1999.
GRi../
Apowa
(Western Region) 14 March. 2000
Timber Industries in the country will
henceforth be encouraged to import timber to supplement those produced locally.
Mr
Dan Abodakpi, Minister of Trade and Industries gave this hint when he visited
MetropStar wood processing company at Apowa, near Takoradi, on Monday as part
of his two-day visit to some selected timber industries in the Western Region.
He
explained that the importation has become necessary as a result of the fast
dwindling state of the country's forest resources, which need to be protected.
Mr
Abodakpi, however, explained that timber industries, which add value to their
produce, would be considered for limited concessions.
Mr
Hamza Ramal, Managing Director of Metro-Star Company who conducted the minister
round the mills said the company was producing under capacity due to lack of
concessions to feed the mills.
He appealed to the ministry of lands and forestry
to ensure that concessions are made available to industries with the requisite
modern timber processing machinery.
Mr.
Ramal said sending down an investigation team to ascertain which industries
qualify to be considered for concessions could do this.
The
Minister also visited B.M.K. Wood Processing limited where he was taken round
the mill by Mr. J. K. Tandoh, in-charge of the Engineering department.
Mr
Richard Druyeh, the General Manager, said the company has been exporting its
products to Cote D'Ivoire, Togo, Senegal, Nigeria and Morocco.
Mr.
Abodakpi commended the company for its export promotion efforts and urged them
to sustain the momentum.
The
minister also visited Patlock Limited, a coconut processing company based at
Apowa where he was received by Dr. A. A. Owusu, chairman of the Board of
Directors of the company.
GRi../