The Ghana Revenue Authority (GRA) is set to start an advanced issuance of Tax Clearance Certificates (TCC) by October 2022, with the completion of automating its tax clearance system, Vice President Dr. Mahamudu Bawumia has announced.
This latest introduction, among others, is aimed at reducing the discretionary use of powers and its attendant alleged corruption by public officials while promoting voluntary compliance and a friendly taxpaying environment, according to Dr. Bawumia.
Prior to this, the process of obtaining clearance certificates had been done manually with the issuance of handwritten certificates over the years.
The process has been characterised by delays in issuance by GRA; challenges in verifying genuine TCCs by recipients; the use of Fake TCCs; and alleged malpractices by some tax officials, among others.
It is against this background that the Vice President said the issue of fake TCCs will be a thing of the past, delays will be eliminated, and there will be enhanced transparency through the automatic verification and electronic issuance of TCCs to taxpayers and the requesting institution.
Also, it will come along with a USSD code that allows every Ghanaian to check on their tax compliance status, thereby enabling the public to verify their tax compliance status.
“All Ghanaians and all entities are therefore encouraged to check their tax compliance status. If they are not compliant, they can immediately file their tax returns and settle anything outstanding on their mobile phone.
“Given that we have now made it very easy for anyone to file and pay their taxes, from next year many public services will require the presentation of tax clearance certificates before their services are rendered. This will enhance compliance, and therefore domestic revenue mobilisation,” Dr. Bawumia said.
The digitalisation drive embarked on by GRA, he noted, is demystifying the tax compliance process with education campaigns and improving transparency in its tax administration by giving the taxpayer a self-service portal.
The Vice President, who was speaking at the 10th Annual International Tax Conference organised by the Chartered Institute of Taxation Ghana (CITG), disclosed that a total of 847,597 tax returns have been filed online as of July 2022.
He noted that Ghana has a major challenge in the area of domestic revenue mobilisation, with the tax/GDP ratio being 13.5 percent compared to 27 percent for South Africa and 34 percent for the advanced (OECD) countries.
“Broadening the tax net is therefore imperative. In this regard, several digital initiatives have been implemented to broaden the tax base and create a vehicle for enhanced domestic revenue mobilisation,” he stated.
Senior Lecturer at the University of Ghana School of Law and Managing Partner of Ali-Nakyea and Associates, Dr. Abdallah Ali-Nakyea – delivering a paper on taxation at the event, entreated government to pay attention to the tax losses being incurred by the country.
“The problem we have that we need to address if we are to improve revenue mobilisation in the country is how to close the tax gap. The tax gap shows the difference between what we can take and collect potentially and what we are actually collecting,” he said.
He argued that if the tax gap is not blocked, the more taxes introduced or higher tax rates will not yield anything meaningful. Therefore, he maintained that closing the gap is enough to enable government’s projected tax/GDP ratio of 22 to 25 percent.
The Conference was organised under the theme ‘Improving domestic tax revenue mobilisation: a consultative and inclusive approach’.