Accra, (Greater Accra) 10 Jan. '99,

The VAT Service yesterday said the prices of beer should have gone down following the introduction of the Value Added Tax (VAT) and not remained the same. An advert in a national daily issued by the management of Ghana Breweries Limited, Guinness Ghana Limited and Accra Brewery Limited said, " the retail prices of their products remained unchanged after the introduction of the Value Added Tax ." The VAT Service said under the present system, wholesale prices of the drinks should have been reduced since they now attract 10 per cent VAT instead of 15 per cent sales tax and 10 per cent excise duty down from 20 per cent. Notwithstanding, the reduction in both the sales tax and excise duty, prices of these drinks at retail outlets, which are registered to charge the VAT have increased. A visit by officials of the VAT Service and newsmen to some shops in Accra revealed that the prices of drinks like Malta Guinness, which used to sell at 1,200 cedis per bottle is now sold at 1,300 cedis per bottle. The visit is a follow up to a survey conducted by the VAT Service to find out whether traders and providers of services are complying with instructions given them and to also acquaint themselves with problems being encountered after the take off of the VAT last week. Some of the shops visited included Mobil Mart at the Mobil House, and Danabus Cleaning Services at Adabraka, Spicy Chicken Restaurant at Asylum Down, Somotex show room at the Pyramid House and DUPONT, car paint sales outlet, the only company which was using the correct procedure. The Manager of the Mobil Mart, Mr S. C. Yamoah, who had increased prices of some of his drinks in addition to incorrect positioning of the VAT certificate said he is only charging VAT according to the prices given him. He said he has even had to increase the price of bread at his shop. for instance, a loaf of bread which was sold for 1,500 cedis had been increased to 1,700 cedis because, he said, the distributors, Fairborne Biscuits Limited at North Kaneshie, have increased their price from 1,300 cedis to 1,419 cedis. An inspection of the invoice issued indicated that the distributor reduced the original price of 1,300 cedis a loaf by 10 cedis before slapping on VAT contrary to the stipulated procedure. At Danabus , workers were charging VAT on existing fees for services on input tax that are supposed to be deducted on tax payable to the VAT service. They, however, explained that this was due to the fact that they did not understand the operation of the VAT very well and did not know they could claim the tax paid on inputs. While the Somotex showroom had on display a photocopy of the VAT certificate, Spicy Chicken had theirs in a drawer and were charging the original prices for their food. The VAT officials advised the defaulting shop owners on how to go about charging the VAT. GRi