Monday, 26 February 2018

Tax Stamp implementation starts March 1st

Image result for Tax Stamp 

Adnan Adams Mohammed

In spite of strong opposition by business against the implementation of the Excise Tax Stamp, the government has declared 1st March, 2018 as the effective date for the implementation of the tax policy.

This means, all businesses, classified by the tax policy as obligated to use the tax stamp on their products are to comply by embossing the tax stamp on their products and are to pay the tax charge to the government.

According to the Deputy Finance Minister, Kweku Kwarteng, any business operators who fail to comply with the policy implementation guidelines will have their goods seized and will be subsequently dealt with by the law.

He said, government can no longer hold back the implementation of the Excise Tax Stamp Policy due to protests from affected businesses as the country is losing revenue due to under declaration.

Goods expected to be affected by the excise tax stamp include cigarettes and other tobacco products, bottled or canned alcoholic beverages and nonalcoholic carbonated beverages as well as bottled water.

According to the government, the tax stamp comes with a number of benefits which include: enabling the Ghana Revenue Authority to assess the exact tax liability of these manufacturers and importers to minimise the under-declaration of sales and import volumes; and helping the government identify fake and counterfeit goods and strengthen efforts to fight the smuggling of these fake and counterfeit goods into the country.

However, business associations were still meeting as at Friday, 23 February 2018, to finalise their position as to whether or not to agree with the implementation of the Tax Stamp, effective 1st March 2018.

The businesses had called on government to suspend the Tax Stamp implementation, as they have not been properly integrated into the implementation process.

They have also threatened to withdraw their services, and close down their businesses, until their concerns are addressed by the government.

In an interview with the businesses on their take on the effective date for the Stamp Tax commencement, the Executive Secretary of the Importers and Exporters Association of Ghana, Sampson Awingobit said, a final decision will be arrived after the meeting so could not make any concrete statement as at the end of last week.

It was made known in November last year that, government is to spend US$58.95 million dollars on the printing of stamps, including the purchase of servers and other maintenance activities for the implementation of the Tax Stamp Policy.

The amount is for a period of five years, with US$11.79 million dollars being spent each year.

Kwaku Kwarteng, the Deputy Minister of Finance, revealed this at a Tax Stamp Sensitisation Workshop, as part of the Government’s strategy to familiarise the media with the policy and its implementation, in Accra.

He said the previous government had paid part of the amount and the new government had also paid some considerable amount to the Company manufacturing the stamps.
Image result for tax stamp

Tax stamps are small stickers with security features, supplied by government to some manufacturers and importers to be affixed to their products before they are released onto the market.

These stamps, once they are seen on a product, provide a significant guarantee that the products are authentic.

In line with the Excise Tax Act, 2013, the Government would begin the implementation with Tobacco, Alcoholic and non-alcoholic drinks, bottled water and textiles when the policy takes-off.

He said the policy was part of Government’s effort to address the counterfeiting of products on the markets and to improve revenue generation.

He said the Government needed to improve on revenue mobilization by expanding the tax net to include more people to enhance the development of the economy.

“Once the tax stamp policy has been adequately rolled out, government will lead the campaign to remind consumers that patronage of products that ought to have tax stamps but do not have tax stamps is unsafe and that consumers do so at their own risk,” he explained.

Mr Akwasi Yankyera, the Chairman of the Implementation Committee, said with the new policy, the Government anticipates a 20 percent increase in revenue compared to what was collected previously.

After stakeholders consultation organized by the Committee, a recommendation was made for the sharing of the cost of the stamps, particularly, at the inception of the programme to engender stakeholders to buy in as well as reduce the potential burden on both the affected taxpayers and the Ghana Revenue Authority.

It was also made known that, GRA had taken steps to meet the requirement of this provision in the Act, by establishing a modern and efficient affixing facility at the port of Tema and the Aflao entry point.

“Affixing facilities are also being set up at Takoradi, Elubo, Akanu and Kpoglo,” Mr Yankyera added.

He said all products in the affected categories found without the excise tax stamp affixed to them beyond the transition period or had found to have fake, counterfeited or altered stamps shall be seized as prescribed.

But, the Food and Beverage Manufacturers’ Association has threatened to shut down their businesses if government fails to review the current form of implementing the tax stamp.

But Mr. Kwarteng said government will not rescind the decision to implement the policy.

“If your products are found on the market and they are not stamped, they will be seen as unlawful products, they will be seized and the manufacturers and importers will be investigated and sanctioned.”

Businesses that have so far complied with the policy ahead of its implementation were commended by the Deputy Finance Minister.

“I’m glad to say that some tobacco and other products on the market have already got the stamps ahead of the implementation date, we are grateful to them for complying with the law.”