According to section 41 of the VAT Act, businesses are compelled to issue VAT invoices at all times – and failure to do so contravenes the law.
It is to this end that the Ghana Revenue Authority (GRA) is continuing its arrests and clampdowns on non-compliant VAT-eligible businesses. Head of Accra Central Enforcement Unit of the GRA, Assistant Commissioner Joseph Annan, during an enforcement exercise in Accra said the operations will continue till full compliance is achieved.
GRA has set a revenue target of GH¢106billion, of which the Customs Division is expected to collect some GH¢28.5billion in 2023.
With the Bank of Ghana reporting in its May 2023 Monetary Sector Report an increase in domestic VAT collection by 92.4 percent year-on-year basis from GH¢649million to GH¢1.2billion in first-quarter this year, Mr. Annan said the performance gives extra motivation for the authority to meet its target for this year.
GRA has listed some 93 businesses across the capital as targets of enforcement and compliance this year. Boosting domestic revenue mobilisation is crucial to government as it forms a cardinal requirement of the 3-year IMF US$3billion loan facility; therefore, the GRA is being charged to up its game when it comes to the issue of domestic revenue collection.
Indeed, the GRA has a number of tax policy initiatives designed to boost domestic revenue mobilisation such as the Electronic VAT, Electronic Tax Clearance Certificate, upfront payment on imported goods, excise tax stamp and resumption of vehicle income tax payment, among others.
Other initiatives include the ongoing e-VAT invigilation exercise, as well as test purchase and mystery shopping exercises by the Authority.
Revenue mobilisation challenges do not stem from low tax rates, but rather the tax losses incurred. Through efforts of the Ghana Revenue Authority, government has been able to acquire a substantial number of potential tax payers. It is now left to mine the data to get a clear understanding of the tax-paying atmosphere.
Broadening the tax net through strengthening tax payer registrations, taxation of the informal sector, reviewing policy and legislation, as well as up-scaling business intelligence and analysis skills to trace and track illicit financial flows.