The prudence of this policy, according to Mr Yeboah, is that there is a high correlated ripple effect between high turnover and profits for importers and manufacturers as goods consumption will increase with decrease in prices of goods.

The Association of Ghana Industries (AGI) and traders should rather be more grateful to the government for the likely boost to the economy, he stated.

 He, however, called for the government to endeavour to bring policies that would encourage competitive prices of locally manufactured goods in the country.

He said consumers were likely to enjoy a further 33.5 per cent reduction in consumer goods of products manufactured in the country whether 17.5 per cent or three per cent Flat VAT was used.

“These further savings are due to savings on 20 per cent duty and 7.7 per cent import levies. That is why the one-district, one-factory policy by the government should succeed at all cost,” he argued.

“Though there have been some arguments that the three per cent Flat VAT is rather increasing the cost of goods when the analysis is done superficially without appreciating the cumulative 17.5 per cent VAT that is added to consumers' prices of goods. The consumer finally bears the cost of VAT and so the 3 per cent VAT finally will be less cumbersome in computation,” he reasoned.

All things being equal, he said, the government would not lose revenue on 17.5 per cent VAT application procedures.

This, he said, was due to the fact that total VAT on consumers goods for 17.5 per cent VAT was the same as the cumulative VATS of importers and manufacturers, Net Retails' VAT and Net Consumers' VAT at GH¢62.26 and GH¢46.26 respectively. The government has, therefore, reduced the cumulative 17.5 per cent burden on consumers.