Debates of 7 Feb 2007

Order! Order! Correc- tion of Votes and Proceedings for Tuesday, 6th February, 2007 Page 1 … 10. Hon. Members, we have the Official Report for Friday, 8th December, 2006. [No correction was made to the “Votes and Proceedings” and the “Official Report” for Friday, 8th December, 2006.]
I t em 3 -- Hon . Min is te r fo r Transportation. Question No. 336, hon. Member of Parliament for Zebilla?

Mr. Speaker,
the hon. John Ndebugre is not around and he has authorized me to ask the Question on his behalf, if I may get permission from you.

Go ahead.

Hon. Member for Zebilla,
you are here. I grant you permission to ask supplementary questions.

Mr. Speaker, thank
you very much. Mr. Speaker, from the Answer of the hon. Minister, may I know what plans the Ministry has in the meantime to make sure that the road is motorable?

Mr. Speaker,
the available information to me is that the road is motorable. If however, my hon. Colleague has any other information I will be glad to take it on board and discuss it with my technical officers.

Mr. Speaker, I would
like to know from the hon. Minister if he is aware that there are quite a number of potholes and that even though the potholes have been marked out for rehabilitation for quite sometime now, the work is not being done and it is posing a very serious danger to motorists using the road.

Mr. Speaker, my hon. Colleague was rather asking for asphalting of the road, but now that he is talking of some potholes that need to be
filled, I will definitely ensure that this is done; because we need to have all these roads in good condition and in good state of repair. It is an important national road.

Mr. Speaker, I would like to know finally from the hon. Minister if he would be visiting the site, the road, to determine its present state, as well as the assertion that it is carrying very heavy load.

Mr. Speaker, it is always good that we try and encourage the rules relating to delegation, to apply at all material times. Therefore, I will always ensure that we get the officers who are responsible for this detailed work to do so. But it is also a good practice that occasionally the Minister himself would be out of Accra visiting a place like this. In fact, I intend on one such trip and should it reach Bawku, I will definitely love to be there. I intend serving him notice when I am going to that area so that we all do a joint inspection.

Mr. Speaker, I want to find out from the hon. Minister for Transportation why they have not put any contractor on the Bolgatanga-Bawku road which is a very, very busy trunk road to do routine maintenance, to check such potholes as is done on such busy trunk roads.

Mr. Speaker, it is not a normal practice to put a permanent contractor on each road. The contract is awarded as and when the need arises for routine maintenance and spot improve- ment. I am sure over the last one month or so there have been a lot of advertisements asking contractors to work on a number of roads. I will find out whether this Bawku road is one of the roads that have been earmarked for that. If it is not, then taking
a cue from the advice given by my hon. Colleague Member of Parliament, that it calls for routine maintenance, we will ensure that that is done.

Mr. Speaker, the Bawku-Bolgatanga trunk road links with the famous Gambaga Scarp which has already caved in. May I know from the hon. Minister for Transportation what plans he has to work on the Gambaga Scarp, which is part of the Bawku- Bolgatanga trunk road linking Yendi and which carts food from areas like Bimbilla, Yendi and other areas to Bawku?

Mr. Speaker, I would have loved to have a clarification whether this is not another road, because my brief is on the Bolgatanga-Bawku road. I am inclined to believe that this is another road, and in such situations it is just fair that one gets notice to talk about link roads to the Bolgatanga-Bawku road.
But Mr. Speaker, in fact the latest brief I have secured is that the bid for the maintenance of this particular Bolgatanga- Bawku road is being evaluated and we believe that after the evaluation it will be done. I have also been told point blank that this is not part of the Bawku-Bolgatanga road. But I am always available to discuss it with my hon. Colleague since every road is very important.

Question number 479 -- Hon. Joseph Yieleh Chireh, Member of Parliament for Wa West?
Some hon. Members: Absent.

Question number 483 -- Hon. Francis Yaw Osei-Sarfo, Member of Parliament for Krachi West?
Some hon. Members: Absent.
M r. S p e a k e r : M i n i s t e r f o r Transportation, thank you very much for appearing to answer these Questions.

Mr. Speaker, as we all may be aware, the hon. Minister for Finance and Economic Planning has gone to China to ensure that we get the agreement for the Bui Dam signed. In fact, I spoke to him this morning and among the things he wants me to look at is the Second Reading of this Value Added Tax (Amendment) Bill.
Therefore, I want to crave your indulgence to move this motion on his behalf.

Yes, go ahead.

Mr. Speaker, I beg to move, that the Value Added Tax (Amendment) Bill, 2006 be now read a Second time.
Mr. Speaker, in moving the motion, I want to draw hon. Colleagues' attention to the Memorandum relating to this Bill.
In the 2006 Budget Statement to Parliament, reference was made to the introduction of a special Flat Rate Scheme (FRS) for the collection of VAT in the informal retail distribution trade sector. The scheme is aimed at simplifying the Value Added Tax collection and accounting mechanism to address daunting difficulties faced by the informal sector and also to improve compliance in that sector. It is envisaged that the special FRS would address the attendant challenges faced by the VAT Service in its administration of the VAT, in respect of the informal retail
sector which has grown in size and is still growing.
The projection is that the introduction of the Flat Rate Scheme will result in an enhanced revenue mobilization from the retail sector because the tax net would be widened.
The purpose of the Bill is therefore to amend the Value Added Tax Act 1998, Act 546 to enable Parliament give legal backing to the proposal. I beg to move.
Question proposed.

Chairman of the Committee (Nii Adu

Daku Mante): Mr. Speaker, I beg to read your Committee's Report.

1.0 Introduction

The Value Added Tax (Amendment) Bill, 2006 was laid in the House on Thursday, 14 th December 2006 and referred to the Finance Committee for consideration and report in accordance with the 1992 Constitution and the Standing Orders of the House.

To consider the Bill, the Committee

met with the Minister for Finance and Economic Planning, hon. Kwadwo Baah- Wiredu, Deputy Minister for Finance and Economic Planning, hon. Prof. George Gyan-Baffour, the VAT Commissioner, Mr. Anthony Minyilah and officials from VAT Service as well as the Ministry of Finance and Economic Planning and reports as follows: 2.0 References

In considering the Bill, the Committee referred to the following documents:

1. The 1992 Constitution of Ghana.

2. Value Added Tax Act, 1998 (Act 546)

3.0 Purpose of the Bill

The purpose of the Bill is to amend the Value Added Tax Act, 1998 (Act 546) as amended to give legal backing to a Flat Rate VAT Scheme that will facilitate the collection of VAT in the retail trade sector and to provide for related purposes.

4.0 Observations

The Committee observed that the Flat Rate Scheme (FRS) has been developed to address difficulties being encountered by retail traders in the informal sector in administering the standard credit system of VAT currently in place.

The Commit tee was informed that the Scheme was borne out of the recommendations of a committee set up by the Value Added Tax Service and the Ghana Union Traders Association (GUTA) to find a simplified system for accounting for VAT in the retail trade sector.

The Committee again observed that the FRS is not to entirely replace the current input/output system but to run concurrently with it.

It was also noted by the Committee that all taxable, zero-rated and exempt goods will remain so under the Flat Rate Scheme.

Again, the Committee was informed that operators of the Flat Rate Scheme would issue a simplified VAT/NHIL invoice to their customers instead of the existing one.

The Committee noted that retailers of goods shall be issued with the regular VAT certificate of registration when they register with the VAT Service. In addition to the certificate, the Service will issue special stickers to those operating the FRS

Scheme which they will display in their shops to inform consumers/customers that they are operating the FRS scheme.

The Committee observed that the Flat Rate Scheme has the benefit of easier record keeping, social acceptability, as well as simplified and easy completion of returns.

The committee informed the Committee that revenues accruing to NHIL would not be affected as the ratio of 5/6: 1/6 between VAT and NHIL will be maintained.

The VAT Commissioner expressed optimism to the Committee that the introduction of the Flat Rate Scheme will widen the tax base thereby enhancing national revenue mobilization.

The Committee was informed by the VAT Commissioner that based on scientific calculation, and using the legal rate of the VAT and NHIL levy, approximately 3 per cent represents the effective rate of tax (using the input/output tax system) as opposed to the 5 per cent proposed by some Members.

The Committee noted through its deliberations with the VAT Service that some retailers above the ¢1.2 billion threshold have been abusing the current input/output tax system and thereby successfully reducing their taxes.

In the light of this, the Committee proposes an amendment that would ensure that all retailers of goods would account for VAT under the Flat Rate Scheme, save that the Commissioner may direct a retailer of goods to account for VAT under the Invoice Credit Method where the Commissioner believes such a directive would best serve the nation's revenue interest.

Mr. Speaker, your Committee also has proposed certain amendments to the Bill. It will do so at the appropriate stage.

5.0 Conclusion

In conclusion, Mr. Speaker, your Committee concludes that it is in the right direction as it will help enhance VAT revenue collection in the retail trade sector. The Committee therefore respectfully recommends to the House to adopt its Report and pass the Value Added Tax (Amendment) Bill, 2006 subject to the amendments proposed.

Respectfully submitted.

Question put and motion agreed to.

Nemine contradicente.

The Value Added Tax (Amendment)

Bill, 2006 was accordingly read a Second time.

Hon. Majority Leader, any indication at this stage?

Mr. Speaker,
in the light of the events of yesterday, there is the urgent need for the Majority Caucus
to meet so as to consider some of the things we have been hearing on radio and in the newspapers. I am not too sure whether officially you are aware of why our Colleagues of the Minority are not with us today. But whatever it is, business must continue for the good people of Ghana.
Therefore, we want to adjourn so that we can have a caucus meeting to enable us know what steps we should take under the circumstances. I therefore move that this House do now adjourn till tomorrow, at 10 o'clock in the morning.

Mr. Speaker, I
beg to second the motion.
Question put and motion agreed to.