Editorial: e-VAT regime set to improve revenue collection


Since it is deemed that the country’s VAT penetration and performance is regarded as inadequate compared to countries in the sub-region, the Ghana Revenue Authority (GRA) is set to start the first phase of electronic value added tax (e-VAT) implementation.

It follows the successful pilot of some 50 targeted taxpayers on the certified electronic invoicing system.

The country’s VAT penetration and performance is positioned at about 17 percent compared to Benin, which has a penetration of up to 40 percent; Côte d’ Ivoire, 32 percent; Niger, 29 percent; Senegal,33 percent; Sierra Leone, 25 percent; and Togo 43 percent.

The electronic value added tax (e-VAT) implementation involves some 600 taxpayers in the Large Taxpayer Office (LTO) who will be integrated into the Commissioner-General’s invoicing system from March 31 to June 1, this year.

GRA says the targeted 600 will pay 90 percent of total VAT revenue and a total of 80 percent of the country’s total domestic tax revenue.

Philip Acquah, who is the Assistant Commissioner – VAT Administration, notes that the second phase of the initiative will start immediately after the completion of the first part and end by the fourth quarter of 2023. In all, it will include some 1000 medium taxpayers.

Mr. Acquah spoke at a Quarterly Tax Dialogue Series hosted by the UK Ghana Chamber of Commerce (UKGCC) and PwC Ghana in Accra recently where he explained that one of the key benefits of the e-VAT is to formalise the large informal sector and to detect misrepresentation of tax.

The third phase of the implementation will include all other VAT registered taxpayers, and will be effective by the end of December 2024, he added.

The GRA has set a revenue target of GH¢206billion, out of which the Customs Division is expected to collect some GH¢28.5billion.

The Authority is seeking to leverage the e-VAT regime to improve tax collections as the authority currently rakes in some GH¢23.4billion from VAT, data from the Finance Ministry has shown.

The introduction of the e-VAT, according to Head of Tax Policy Unit at the Ministry of Finance Daniel Nuer, is a strategy to block the loopholes in the country’s tax administration and also seeks to tackle forgery of manual invoices, carding, among others.

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