A study by the Ghana Integrity Initiative (GII), on exploring innovative measures to promote voluntary tax compliance (VTC), as one of its key findings, has established that 68.4 percent of businesses have not been audited by the GRA in the last three years.
According to the survey, 68.4 of the respondents who answered the question “Has your business or organisation been audited by the GRA in the past three years?” replied in the negative.
The remaining 31.6 percent however said their businesses have been audited by the tax authority in the past three years.
The majority of these are trading sector businesses (50.9 percent), while 24.5 percent are in the services sector, 11.3 percent in the public sector and 8.2 percent being NGOs, with the rest being in the manufacturing and processing sector.
Addressing participants to share results of the study at a National Tax Policy Forum in Accra, GII’s Finance Manager, Benedict Doh, suggested that since there are currently no stringent monitoring and evaluation systems – such as electronic invoices to inspect and assess taxes remotely – field audits remain a sure way of preventing and detecting acts of tax avoidance and evasion.
Mr. Doh explained that the tax audit department of the GRA must be well-resourced to carry out this herculean task to save tax revenues for the state.
Responding to the findings and key measures, Deputy Commissioner of Operations at the GRA, Kwesi Eghan, said the authority as part of its processes is deploying an electronic invoice system at latest by October 1, 2022 to curb audit anomalies in the current tax collection and inspection regime.
He said one key measure introduced by the GRA to boost voluntary tax compliance is the online platforms for tax filing and payment.
The survey
A sample size of five hundred (500) respondents – targetting at least 60 percent of businesses and 40 percent of the other identified stakeholders – was used. In all, five hundred and three responses were received by the GII and used for the analysis.
The research adopted a random sampling approach in giving all of the sample population an equal opportunity to be part of the study.
The study also included an online tool that captured the views of stakeholders in the value chain – businesses, policymakers, implementers, academics and CSOs, among others.
Additionally, key informant interviews (KIIs) were used in collecting information from experts to complement the responses obtained through questionnaires.
The research found that though 61.2 percent of the survey respondents were aware of tax audits, most of them had not been audited in the last few years.
Nonetheless, the remaining 38.8 percent of the respondents said they do not know anything about tax audit; but this, Mr. Doh said, is quite significant and leaves much to be desired, as these groups of businesses could be ignorant of the consequences for tax evasion.
The study concluded that a majority of taxpayers, constituting 72.4 percent, are not aware of the tax educational programmes being implemented by the GRA.
It said taxpayers within the informal sector prefer to have their tax education programmes through market broadcasts, as compared to those in the formal sector who choose training workshops, radio and television as their main mediums for tax education.
