RESPONSE TO THE GHANA HOTELS ASSOCIATION’S APPEAL TO FORGO TAX

Posted on September 10, 2012

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This appeal went out from the Ghana Hotels Association at the recent National Executive Committee Meeting. I once sat at this table. I wish I did now, because would I have ever voiced my disapproval. In essence the Association requested that the government “review the 5% revenue authority tax on hotels and release the members of the multiple taxes imposed on them.”

The 5% revenue authority tax is the income tax paid here in Ghana!

The reason? Hotels apparently are having a hard time paying all the required levies, taxes, rates etc. as well as maintaining their establishments.

Can ya believe it? No, not the 5% representing the total income tax paid, but the part about being exempted from taxes!

Taxes represent a social contract between government and the people; and for a whole industry to plead for exemption indicates just how poorly most establishments are doing and how little they think is being done for them and the tourism industry in general by government. It would also indicate that hotel owners perceive that they are being taxed too much. Yes, there are a lot of taxes, levies, rates, and fees and overheads, but this does not warrant exception from a business’s social responsibility to contribute to the national good, especially in a nation plagued by such horrendous levels of abject poverty.

One solution to remedy the perception by hoteliers that they are taxed too much is that they state their rates for their hotels EXCLUDING THE 15% VAT. Including it in the price of the room and having to come up with the amount at the end of the month can add to the perception of paying too much tax. Needless to say, many hotels, many times probably do not issue a VAT receipt opting for an “Official Receipt”.

Four Villages Inn quotes its rates VAT exclusive firmly believing that it is the client that pays this tax, not the business. Simply it is Four Villages Inn’s responsibility to add the value to the business. And how can be do that when we are paying our guests’ taxes as well.

I believe that the Ghana Tourism Authority should monitor Ghana’s hotel’s quotation of rates insisting that they are VAT exclusive.Then maybe hoteliers won’t think they are paying too much.

Just a suggestion…..

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