The Ghana Revenue Authority (GRA) has stepped up efforts to increase tax compliance and generate more revenue for the state.
Among other things, it has introduced an electronic (e) invoicing system that
eliminates the various abuses used by taxpayers to deny the state huge revenue.
The authority rolled out the e-invoicing system for value added tax (VAT) from
October 1 in a phased process that would cover 600 large taxpayers in the first
phase.
The 600 firms being targeted under the phase include listed companies and they
altogether generate more than 90 per cent of VAT revenue and 80 per cent of
domestic revenue.
The e-invoicing exercise is expected to cover medium-sized taxpayers by 2023
before being extended to all businesses in 2024.
Unlike the manual system, the e-invoicing system allows the GRA to monitor live
transactions in companies where it has been deployed, thereby making it
impossible for taxpayers to either under invoice or dodge the payment of VAT.
GRA estimates show that the country's VAT contributions to tax revenue could be
increased to 30 per cent from the current 18 per cent if the various abuses
that the manual invoicing system is prone to are decisively dealt with.
The system was rolled out simultaneously with an electronic tax clearance
certificate (TCC) system that also seeks to remove the abuses the current
system is prone to.
The Head of the Domestic Tax Revenue Division (DTRD) at GRA, Edward Apenteng
Gyamerah, told journalists on Friday that he two programmes formed part of a
tax digitalization agenda being championed by the authority.
He said the authority was optimistic that the e-invoicing and the e-TCC would
help increase revenue generations by removings the malpractices that thr manual
systems have beensubjected to.
Last month, GRA swoops and mystery purchases in various companies that led to
the discovery of non-compliant institutions and the temporary closure of heir
operations.
Me Gyamerah aaid together with the e-invoicing, the GRA was hoping to raise VAT
contribution to total revenue from he current 18 per cent to 30 per cent by
2024.
He said while VAT collections in Ghana's peer nations amounted to 30 per cent
per annum, that of Ghana was aroubd 18 per cent.
This, he said meant that VAT more revenue was being lost through the abuses
that thr manual system was subjected to.
To help deal with this, the Head of DTRD said authority and government amended
Section 42 of the VAT Act, (2013) Act 870 as amended to make e-invoicing
compulsory and the only medium for issuing VAT invoices.
"Throuhh this, we will be able to improve upon compliance, we will have
audit trail and that will allow us to know the volume of transactions every
minute for us to assess the taxes appropriately" he said.
Speaking on the node of implementation, Mr Gyamerah said the system would be
deployed using two different routes.
He said for businesses that have their own platform for issuing VAT, GRA
connect its software for generating the e-VAT invoices into theirs to allow for
take off.
But for businesses that do not have their own systems, he said the authority
would give its software to them at no cost.
On the e-TCC, he said businesses only needed to enter their details into the
e-TCC portal crwates by GRA for the certificates to be generated automatically.
Source: Peacefmonline.com