Real Estate Developers have appealed to President-elect Nana Akufo Addo to “walk the talk” when he is sworn in as President on January 7, next year by fulfilling his promise of abolishing the 5 percent VAT on Real Estate sales.
The VAT, which was initially 17.5 percent, was reduced to 5 percent by the present government but the real estate developers want it scrapped.
Executive Secretary of the Ghana Real Estate Developers Association (GREDA), Samuel Amegayibor, said the newly elected president must fulfill 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 percent VAT has affected business activities.
“For us as business people, this tax was of great concern to us and so we raised it with 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 said.
He, however, stressed that the president-elect Nana Akufo-Addo must fulfill his promise and ensure the 5 percent 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 said.
Government revised its decision to slap 17.5 percent VAT on the real estate sector after serious concerns were expressed by GREDA in the 2015 budget statement.
GREDA petitioned government to find a more effective way of taxing the industry to ensure government and the private sector contribute in bridging the housing deficit.
Although at the time GREDA proposed a 4 percent 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 percent VAT on Real Estate sales to date.
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