Ghana Revenue Authority to Begin Phase One of E-VAT System

The Ghana Revenue Authority (GRA) is set to begin phase-one of onboarding 600 businesses onto its electronic value added tax (e-VAT)

The Commissioner of Domestic Tax at the Ghana Revenue Authority (GRA), Edward Apenteng Gyamerah explained that this will be followed by the issuance of letters to business entities stating the date they will officially be put on the new system. After this, each entity will be assigned a relationship manager who will serve as a liaison between the company and GRA’s technical team.

About The System

The e-VAT is an electronic means of issuing VAT receipts or an electronic invoicing system for VAT-registered businesses.

This system applies to both the VAT Flat Rate and Standard Rate Schemes.

The Numbers

In 2021, a total tax revenue of GH¢57.4 billion was collected for the period as against the targeted GH¢57.1 billion, representing an excess of GH¢377.81million or 0.7 percent.

However, VAT contribution to the total tax collection has consistently declined over the years since 2017 – from 24.88 percent to 19.3 percent in 2021, averaging about 20.73 percent over the period.

Indirect domestic revenue collected in 2021 was about GH¢13.75 million as against the target of GH¢13.95 million, an excess of GH¢202.32 million, representing 1.5 percent shortfall of the target. VAT accounted for 19.3 percent

Focusing on the contributions of VAT in the country’s development, the Commissioner made comparison with neighbouring countries that are reaping the benefits of VAT; with Togo getting 40 percent while Benin and Burkina Faso receive 42 percent and around 50 percent respectively.

What They’re Saying

“Until we are able to improve on our revenue to get an appreciable tax-to-GDP ratio, most indicators that businesses need to improve will not be at the level they want; because when revenue targets are not met, it leads to distress which can affect a number of indicators such as exchange and interest rate among others,” Mr. Gyamerah said.

“Taxpayer information has always been kept secret by officers of GRA. We have provisions in the tax laws that prevent any officer of GRA disclosing a taxpayer’s information to a third party. Information can be disclosed only when it is by order of a court or requested for the purposes of revenue administration; otherwise, no officer has the right to disclose any information.

As we begin implementation of the e-VAT, we will still be guided by the same provisions of keeping the taxpayer’s information secret,” he added.

What Happens Next

The GRA is currently looking at onboarding 600 taxpayers in the first phase by June 2023. Phase-two is expected to be completed in December 2023, and will onboard 1,000 businesses with the entire e-VAT implementation process ending in December 2024.

Source: Business and Financial Times

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