Implementation of 5 new taxes could be tied to completion of public education- GRA
The Commissioner-General of the Ghana Revenue Authority (GRA), Rev. Dr. Ammishaddai Owusu-Amoah has indicated that the implementation of the five tax laws passed by parliament could be tied to the completion of the required public education for citizens and issuance of the necessary guidance.
He explained that even though the law is expected to start from January 1, 2024, there is the need to sensitise the public to be aware to enhance compliance.
“The aim is to start from January 1, 2024, but practicability will be a major factor, because we have to take into consideration the necessary engagements with the public and industry players before the enforcement date can be communicated” , he said.
“We will try and make sure that the necessary guidelines and regulations are in place, before we start enforcing these taxes,” he assured.
Dr. Owusu-Amoah said ordinarily, the implementation of a law starts from the date the President assent it into law, as well as the effect date provided in the law.
“There is the need to provide administrative guidance which is key for effective execution, he said.
Background
Parliament on Friday 22nd December 2023, passed five tax bills. The bills were.
Value Added Tax (Amendment) Bill, 2023,
Excise Duty (Amendment) (No. 2) Bill, 2023
Stamp Duty (Amendment) Bill, 2023
Emissions Levy Bill, 2023
Exemptions (Amendment) Bill, 2023.
The VAT Bill seeks to expand the tax net and extend the zero rate on locally manufactured products, introduce a zero rate on locally-produced sanitary towels and waive the VAT on the import of electric vehicles for public transportation.
The application of the tax will also result in Motor Insurance Premiums going up by more than 21 percent from next year. This is due to the application of Non-Life Insurance Business and products.
The Excise Duty Bill, which has been amended is to increase the excise duty rate on some drinks to align with excise duty rate on beer, reduce excise duty on plastics and expand the coverage of the excise duty on plastics to cover imported plastic packaging.
In addition, government could be raising more than ¢5 billion from the taxes that have been approved in parliament.
GRA and Tax Collection in Ghana today
The GRA has come under some criticisms over its approach in collecting taxes.
The Ghana Union Traders Association (GUTA) and the Abossey Okine Spare Parts Dealers Association threatened to lock up their shops in protest against the GRA.
Responding to the issue, Dr. Owusu-Amoah said the GRA is not fighting the traders but will engage them to ensure that their businesses thrive.
“Concerns about harassment is something that we take seriously. Whatever we do, it’s our aim to make tax payment easier for these businesses and that is a promise”, he said.
He also revealed that “we have engaged some of these business interest groups to deal with their concerns and they are now more committed to support the Ghana Revenue Authority when it comes to meeting their tax obligations”.
Dr. Owusu-Amoah stated that the engagements have been fruitful as the business groups have responded positively to the consultations.
“We have also put in place several measures to deal with concerns of tax payers, and the result in the Tax Quality Assurance Office shows that the issues are being addressed”.
GRA and VAT distress measures
Dr. Owusu-Amoah disclosed that recent measures instituted by the GRA to ensure that businesses that have collected VAT on behalf of the state meet their obligations, have seen collections from the tax improve significantly.
He said based on the multi-pronged approach, the policy has improved compliance and collections as well.
“For those that are compliant, we don’t have any challenge with them, however we are ever committed to help them met their obligations” he noted.
“Any time we moved our team out to enforce VAT payments and put our men in these shops, collection goes up by more than 100 percent”, he added.