In our previous article, we examined the powers of the Commissioner-General (CG) of the Ghana Revenue of Authority (GRA) to ascertain whether or not it is autonomous. It was observed that the powers exercised by the CG require the exercise of discretion, and the power vested in the CG is also a quasi-judicial power that is basically autonomous. Relative to this, Parliament has passed the Revenue Administration (Amendment) Act, 2020, (Act 1029) which has amended four sections of the Revenue Administration Act, 2016, (Act 915).
The main focus of the amendment is to provide for the establishment of an Independent Tax Appeals Board and other related matters. The function of the Appeals Board is to hear and determine appeals against the tax decisions of the CG with respect to objections to tax decisions and assessments. This was hitherto performed by the CG. In addition, there is a modification of the penalty for making false or misleading statements in filing tax returns. The Act has been assented by the President of Ghana to come into force.
Hopes are that with the advent of Act 1029, it is a good intervention for the taxpayer by way of replacing the powers of the CG to hear tax appeals with an Independent Tax Appeals Board. But first of all, one may ask: has establishment of the Appeals Board addressed the issue under Act 915 that an objection against a tax decision will not be entertained by the CG unless the person has –
- in the case of import duties and taxes, paid all outstanding taxes including the full amount of the tax in dispute; and
- in the case of other taxes, paid all outstanding taxes including thirty percent of the tax in dispute?
Also, the amendment has provided some exemptions to the penalty for making false and misleading statement. By the way, we should note that, as provided under Act 1029 and other revenue laws, modest retroactive application of legislations is permissible – i.e., the law can be applied to take effect from a date in the past. This will be discussed in further detail later on; but for now, this article seeks to take into account the establishment of the Independent Tax Appeals Board under Act 1029.
The meaning of tax decision and objection decisions
According to Act 915, a tax decision is a decision made by the CG under a tax law, including an assessment or omission either by the person or him, as a means of enforcing one’s tax liability made under a tax law. And Act 915 provides that an objection to a decision implies that a person who is dissatisfied with a tax decision which directly affects that person may lodge an objection to the decision with the CG within thirty days of being notified of the tax decision.
The Independent Tax Appeals Board
As earlier noted, under the first schedule of Act 1029, it provides for the establishment of an Independent Tax Appeals Board. And to review the main provisions under the schedule, we have:
- Functions of the Tax Appeals Board
The function of the Board is to hear and determine appeals against tax decisions with respect to objections to tax decisions and assessments. This was formerly executed by the CG. Whereas the establishment of the Appeals Board has come in handy for taxpayers, nonetheless an appeal to the Board does not lie as of right since the CG remains a bottleneck.
Thus, in view of the functions of the CG under Act 915, it provides that a person who is dissatisfied with an assessment of his tax liability may lodge an objection to his assessment to the CG within thirty days of being served the notice. This provision is essential for the fact that it tells you how notice for a tax decision is to be served – in that if a notice is served on you, you have thirty (30) days to challenge the assessment.
A taxpayer can before expiration of the period (thirty days), in writing, apply to the CG for an extension of time to file an objection. However, where the CG does not serve the person with notice of the decision within sixty days, the person may, by notice in writing to the CG, elect to treat the CG as having made an objection decision to disallow the objection.
In other words, when he does not hear from the CG, the silence means that his objection has been refused. Subsequently, the taxpayer can file an appeal to the Appeals Board to hear his objection. In essence, a person cannot appeal to the Appeals Board without first lodging an objection to his assessment to the CG.
More significantly, the amendments under Act 1029 to establish the Appeals Board has not addressed the issue under Act 915 that an objection against a tax decision will not be entertained by the CG unless the person has made full payment of the disputed tax in the case of import duties, and thirty percent (30%) of the disputed tax in other cases.
Here, the contention is that the CG can prejudicially exercise his discretion to impose tax liability on a person who may well not be guilty, and whose assets would be taken charge if he fails to pay the outstanding taxes. Also, the amendment does not provide that appeal to the Appeals Board against an objection decision shall operate as a suspension of the actions taken by the CG, although the formation of an Appeals Board does not relinquish the appeal jurisdiction of the Court for review.
- Composition of the Appeals Board
The amendment provides that the Appeals Board shall be made up of:
- A Chairperson, who must be a Ghanaian lawyer of 10 years at the Bar with 10 years’ experience in tax practice or a retired Superior Court Judge.
- Two retired officers of the Ghana Revenue Authority who had a rank of not below Chief Revenue Officer or who qualify for appointment as tax consultants.
- Two other persons with the same qualification as the chairperson.
- Two representatives nominated by the Chartered Institute of Taxation, Ghana, who have 10 years or more tax practice.
- Two representatives nominated by the Institute of Chartered Accountants, Ghana, who have 10 years or more practice.
- Two representatives from the private sector who are women.
The Appeals Board members shall be appointed by the Minister of Finance, and they shall have a tenure of four years and may be reappointed for another four years only. In our opinion, with the appointing power of the panel from government, particularly the Finance Minister, the independence of the Tax Appeals Board is nominal. This is because government regulations can influence behaviour of the panel, often without changing its underlying values and motivations.
- Secretariat of the Appeals Board
The Ministry of Finance shall provide a secretariat for the Appeals Board from where the Appeals Board shall operate. The minister shall designate a public servant with law and administrative background as Executive Secretary to the Appeals Board. Among duties of the Executive Secretary is to receive applications for the appeals, issue notice, keep records of the proceedings of the Appeals Board, keep or cause to be kept and maintained a register of notices and rulings of the Appeals Board, among others.
Furthermore, an appeal, application or any other document required to be filed under Act 1029 shall be filed in the office of the Executive Secretary. In our view, there ought to be a zonal hearing of the tax disputes. For the reason that the requirement for all the sixteen (16) regions in Ghana to have a Secretariat would overstretch the responsibility of the eleven (11) member committee.
- Panel and procedures of the Appeals Board
The Chairman can constitute more than one panel to hear various appeals at a given time, as and when necessary for the purpose of adjudicating a matter before the Appeals Board. A panel of three (3) members shall be deemed as a duly constituted Appeals Board. If a panel does not have the Chairman as part of it, the Chairman shall appoint one of the members to preside as chairperson. The appointed chairperson must have similar qualifications to the Chairman.
A tax appeal against a decision of the Commissioner-General shall be filed with the Executive Secretary of the Appeals Board. The appeal against the Commissioner-General must be brought within thirty (30) days of the tax decision. The parties shall be invited to appear before the panel. The Appeals Board are not bound by rules of evidence. Experts may be invited by the Appeals Board to assist the panel in adjudicating a matter before it.
- Effect of an appeal
Under Act 1029, it provides that an appeal to the Court shall not operate as a stay of execution of an order of the Appeals Board unless the Court otherwise orders. What this means is that the Appeals Board basically reserves some autonomy, subject to the appeal jurisdiction of the Court for review – which includes an injunction to restrain an execution until the Court makes a final decision, a certiorari, to quash the tax decision or a declaration by the Court on the matter brought forth.
Summary and recommendation
With the establishment of the Independent Tax Appeals Board under Act 1029, it is observed that:
- The independence of the Tax Appeals Board is nominal. This is because with the appointing power of the panel from government, particularly the Finance Minister, government regulations can influence behaviour of the panel, often without changing its underlying values and motivations.
- The establishment of the Appeals Board has not addressed the issue under Act 915 that an objection to a tax decision will not be entertained by the CG unless the person has made full payment of the disputed tax in the case of import duties, and thirty percent (30%) of the disputed tax in other cases.
- The amendment does not provide that appeal to the Appeals Board against an objection decision shall operate as a suspension of the actions taken by the CG.
- Also, the Tax Appeals Board has a reserve of an autonomy subject to the appeal jurisdiction of the Court for review – which includes an injunction to restrain an execution until the Court makes a final decision, a certiorari, to quash the tax decision or a declaration by the Court on the matter brought forth.
On that note, it is recommended that:
- The hearing of the dispute by the Tax Appeals Board to be zonal. This is because the requirement that all the 16 regions in Ghana should have a Secretariat would be an overstretch of the duty of the 11-member committee.
- Parliament ought to consider further amendment of Act 1029 to repeal the requirement of full payment of the disputed tax in the case of import duties, and thirty percent (30%) of the disputed tax in other cases before an objection is entertained by the CG – for the reason that it is a violation of fair trial to be found guilty of an offence before being proved to be so. Otherwise, the Tax Appeals Board will be a mere creation of statute.
About the authors
Michael Sumaila Nlasia is a research assistant at Center for Data Processing and Geo-Spatial Analysis (CEDPA), and a graduate of GIMPA Law Faculty. Email: [email protected]
Frank Nartey Tetteh is a Branch Manager of Fidelity Bank, and a graduate of GIMPA Law Faculty. Email: [email protected]