Real Estate Developers are admonishing the President elect, Nana Akufo Addo to “Walk the Talk” when he is sworn in as President on January 7th , by fulfilling his promise of abolishing the 5% VAT on Real Estate sales.
The VAT, which was initially 17.5% was reduced to 5% by the present government but the real estate developers want it scrapped.
In an interview with Citi Business News, Executive Secretary of the Ghana Real Estate Developers Association (GREDA), Samuel Amegayibor said the newly elected president must put into action his promises.
“That is the beginning of it to walk the talk meaning that whatever you promised the people, you go ahead to deliver.” he stated. Mr Amegayibor lamented over the effect of the VAT on businesses.
According to him, business has slowed down as demand for estates reduce due to high cost. “It has really brought our sales down and increased the cost of houses and the general public is complaining,” he said, adding that the current government’s refusal to scrap the 5% VAT has affected business activities.
“For us as business people, this tax was of great concern to us and so we raised it to the outgoing president. We dialogued for close to two years before we were able to get a cut.
Our original expectation was for it to be completely scrapped but much as we tried government insisted that this tax must pass so they went ahead and implemented it,” he recalled. He, however stressed that the president-elect, Nana Akufo Addo must fulfill his promise and ensure the 5% VAT on Real Estate sale is abolished.
“We are currently working with it but it is not good for us at all. So if the president elect has promised that perhaps they share with us that it should be scrapped then they should just go ahead and do it as early as possible,” he demanded.
About the 5% VAT on Real Estate sales Government revised in the 2015 budget statement, its decision to slap 17.5% VAT on the real estate sector after serious concerns were expressed by GREDA.
GREDA petitioned government to find a more effective way of taxing the industry to ensure government and the private sector contribute in closing the housing deficit. Although at the time GREDA proposed a 4 % VAT during discussions with government, the Vice President Paa Kwesi Amissah-Arthur maintained that government was right to tax the real estate sector.
GREDA and other players in the industry further insisted that the move could lead to a hike in prices of houses in the country. But that notwithstanding government maintained the 5% VAT on Real Estate sales till date.
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