e-VAT regime for 600 large taxpayers set to begin

The Ghana Revenue Authority (GRA) is set to start the first phase of electronic value added tax (e-VAT) implementation, where some 600 taxpayers in the Large Taxpayer Office (LTO) will be integrated into the Commissioner-General’s invoicing system from March 31 to June 1, this year.

This follows the successful pilot of some 50 targetted taxpayers on the certified electronic invoicing system.

The GRA said the targetted 600 pay 90 percent of total VAT revenue and a total of 80 percent of the country’s total domestic tax revenue.

The second phase of the initiative, Assistant Commissioner – VAT Administration, Philip Acquah, said 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, who was speaking at a Quarterly Tax Dialogue Series hosted by the UK Ghana Chamber of Commerce (UKGCC) and PwC Ghana in Accra, 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 disclosed.

The virtual dialogue, themed ‘e-Vat and its Implications for Businesses’, saw participation from the business community and stakeholders of key institutions.

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

Importantly, the tax collector 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 country’s VAT penetration and performance is regarded inadequate among countries in the sub-region – 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.

Meanwhile, a Tax Partner at PwC Ghana, Abeku Gyan-Quansah, told the B&FT that a key to measure the success and impact of the e-VAT would be how the GRA is able to collect more than the GH¢23.4billion in 2023.

Head of Tax Policy Unit at the Ministry of Finance Daniel Nuer said tax collection comes at great cost, and as such, there is a need to utilise available strategies to block all loopholes.

“This is one of the reasons for the introduction of the e-VAT, which seeks to tackle forgery of manual invoices, carding, among others,” he said.


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