‘We don’t know when government is taking it out’ – Mark Badu Aboagye questions VAT reform timelines
The CEO of the Ghana Chamber of Commerce and Industry, Mark Badu Aboagye, has expressed mixed reactions to the government’s VAT reform plans outlined in the 2025 budget.
Speaking on March 13, he acknowledged some positive steps but criticized the uncertainty surrounding VAT reform timelines and the prolonged burden on businesses.
“For me, it is a good start. Obviously, just like any normal budget, there will be some opportunities and there will be some inherent risks,” he stated.
He noted that while certain policies in the budget aim to improve the business environment and enhance productivity, the tax structure remains a major concern.
Mr Badu Aboagye particularly criticised the now-removed E-Levy, calling it “undoubtedly the most nuisance tax that I’ve ever seen in this country.”
He argued that the levy distorted both consumption and production, making it an obstacle to business growth.
“We raised concerns on the very day that the E-Levy was introduced. We clearly indicated that it’s not going to help business.
“It’s going to help consumers, and to the extent that even the rate was high, through our advocacy, we were able to bring it down to 1%. So if they are taking it out, for me, I think it’s a fair deal.”
In addition to the removal of the E-Levy and the COVID-19 levy, Mark Badu Aboagye stressed the need for an urgent VAT reform.
“Through the tax reform, we have said it over and over again that our VAT structure is too complicated. It doesn’t enhance any compliance.
“People don’t even understand a structure where you are combining both the Standard VAT and most of these levies that you cannot claim input on, but which translate into direct costs to businesses.”
His biggest concern, however, was the vague timeline for VAT reforms.
“We were expecting a straightforward comment on what exactly they are going to do. But to defer it to a period that we are not even aware of means that within this time, businesses are still going to be paying the VAT of 22%,” he lamented.
“I don’t know when they are going to take it out.”
Despite these concerns, Mr Badu Aboagye acknowledged that some macroeconomic indicators, such as inflation, were moving in a positive direction, though he still had reservations about their accuracy.
“Looking at the numbers, the macroeconomic indicators that they put forward—inflation, even though I have issues with it—maybe we’ll get there.”
As the business community waits for clearer timelines on VAT reform, Mr Badu Aboagye’s remarks highlight the continued struggle of Ghanaian businesses under a complex tax regime and the urgent need for decisive policy implementation.