College of Humanities University of Ghana Business School Department of Accounting ACCT 405 TAXATION Lesson 12 – Indirect Taxation (Value Added Tax)
Session Overview Lesson Objectives: • By the end of this section you should be able to • Trace the History of VAT in Ghana • Explain the concept of VAT • Discuss when a person becomes a taxable person • Outline the types of VAT in Ghana • Outline exempt taxable persons • Account for VAT transactions including those with withholding taxes and discounts Prof. M. Amidu, Dr. I. Bedi & Mr. A. Ali-Nakyea
Session Outline The key topics to be covered in this session are as follows: • Value Added Tax • Taxable goods Prof. M. Amidu, Dr. I. Bedi & Mr. A. Ali-Nakyea
Reading List Ali-Nakyea A. (2014), Taxation in Ghana-Principles, Practice & Planning, Black Mask Ltd., 3 rd Edition. Chapter 18, (page 349-403) Agalega, E. (2017) Ghana Taxation: Comprehensive Guide on New Tax Laws, 2 nd Edition, SMK Graphicx, Koforidua, Ghana. Chapter 14, (page 475-510) Income Tax ACT, 2015 (ACT 896), Ghana Publishing Company Limited, (Assembly Press), Accra, Ghana, Section 6 and First Schedule Prof. M. Amidu, Dr. I. Bedi & Mr. A. Ali-Nakyea
VALUE ADDED TAX Topic One Prof. M. Amidu, Dr. I. Bedi & Mr. A. Ali-Nakyea
Introduction • Heavily used in developing countries • Generates high tax revenue • Leads to frequent changes in tax laws Prof. M. Amidu, Dr. I. Bedi & Mr. A. Ali- Nakyea
History of VAT The Value Added Tax (VAT) was introduced in Ghana as an integral part of the tax reform programme initiated by Government in 1983. It was designed primarily to address the defects of Sales and Service Taxes that it replaced. The VAT Service (VATS) was brought into being with the introduction of the short- lived 1995 VAT under the VAT Act, 1994 (Act 486) which was promulgated in December, 1994. It became operational on March 1, 1995. Following implementation problems, it was repealed and replaced by the defective Sales and Service Taxes it had replaced within three and half months (105days) of its inception. Prof. M. Amidu, Dr. I. Bedi & Mr. A. Ali- Nakyea
History of VAT As a consequence, the VAT Service was contracted into a much smaller VAT Project for the purpose of planning and implementing the re-introduction of the re-packaged tax.
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- Fall '18