E-VAT system to check tax compliance, improve business processes

The Ghana Revenue Authority on October 1, 2022 deployed the certified electronic invoicing system – commonly known as E-VAT – in accordance with the amended Valued Added Tax Act 870. The E-VAT certifies every invoice issued by taxpayers in near-real time for revenue assurance purposes. Speaking to the public on the Eye on Port programme, members of the E-VAT Technical Team of the Ghana Revenue Authority emphasised that the E-VAT is not a new tax. Mrs. Felicia Omotayo Owusu said the rate of tax remains the same for both the standard and flat rate schemes. “The rate of tax for VAT in the standard rate is 4.5%, NHIL is 2.5%, GETFUND Levy is also 2.5% and COVID-19 Levy is 1%. For flat rate schemes, VAT is 3% and COVID-19 is 1%. Nothing has changed. It is just the process of issuing an invoice. We are using electronic means so we can authenticate and validate the invoices in real or near-real time.” Mr. Patrick Frimpong Danso on his part said the E-VAT system has seen success in countries where it is being deployed – such as Kenya, Tanzania, Rwanda and Uganda. He added that: “We have a lot of issues with the old system. The GRA had given certain big shops authorisation to print their own invoices. There was a possibility they could be suppressing sales. If they made 100,000 transactions in a month, they could declare only 200. We had no way to verify. There is a software they can use to suppress sales figures”. The GRA in its commencement phase of the programme has begun with some 50 taxpayers, and by 2024 the Authority will on-board all registered taxpayers onto the E-VAT system. According to GRA officials, Mr. Danso’s outfit has engaged the various companies being on-boarded onto the system, taught them how to operate the system and provided them with Relationship Managers to serve as a liaison between GRA and the said company in case of difficulties. “The Melcom outlets are about 74 across the country, and they have all been on-boarded. Same for the China malls and Palace Mall. We started with them so we can learn from the challenges we faced, rectify them and then onboard the rest who have less complex processes,” Mrs. Owusu said. The GRA officials however cautioned persons and business entities which may want to circumvent the system to evade tax. Mr. Frimpong Danso said the GRA is able to monitor all the activities of such tax payers pertaining to the issuance of VAT invoices, and will send out a team whenever anomalies are detected. The officials explained that the invigilation exercise embarked on by GRA over the past few weeks to check compliance is necessary. “The officers will cross-check receipts and record the sales, so that at end of the week they will tally and compare them with returns on the taxpayer files. Invigilation is part of our compliance tools,” Mrs. Owusu revealed. The Ghana Revenue Authority says these initiatives being undertaken will not only improve revenue collection on their part, but also improve business processes.

The Ghana Revenue Authority on October 1, 2022 deployed the certified electronic invoicing system – commonly known as E-VAT – in accordance with the amended Valued Added Tax Act 870. The E-VAT certifies every invoice issued by taxpayers in near-real time for revenue assurance purposes. Speaking to the public on the Eye on Port programme, members of the E-VAT Technical Team of the Ghana Revenue Authority emphasised that the E-VAT is not a new tax. Mrs. Felicia Omotayo Owusu said the rate of tax remains the same for both the standard and flat rate schemes. “The rate of tax for VAT in the standard rate is 4.5%, NHIL is 2.5%, GETFUND Levy is also 2.5% and COVID-19 Levy is 1%. For flat rate schemes, VAT is 3% and COVID-19 is 1%. Nothing has changed. It is just the process of issuing an invoice. We are using electronic means so we can authenticate and validate the invoices in real or near-real time.” Mr. Patrick Frimpong Danso on his part said the E-VAT system has seen success in countries where it is being deployed – such as Kenya, Tanzania, Rwanda and Uganda. He added that: “We have a lot of issues with the old system. The GRA had given certain big shops authorisation to print their own invoices. There was a possibility they could be suppressing sales. If they made 100,000 transactions in a month, they could declare only 200. We had no way to verify. There is a software they can use to suppress sales figures”. The GRA in its commencement phase of the programme has begun with some 50 taxpayers, and by 2024 the Authority will on-board all registered taxpayers onto the E-VAT system. According to GRA officials, Mr. Danso’s outfit has engaged the various companies being on-boarded onto the system, taught them how to operate the system and provided them with Relationship Managers to serve as a liaison between GRA and the said company in case of difficulties. “The Melcom outlets are about 74 across the country, and they have all been on-boarded. Same for the China malls and Palace Mall. We started with them so we can learn from the challenges we faced, rectify them and then onboard the rest who have less complex processes,” Mrs. Owusu said. The GRA officials however cautioned persons and business entities which may want to circumvent the system to evade tax. Mr. Frimpong Danso said the GRA is able to monitor all the activities of such tax payers pertaining to the issuance of VAT invoices, and will send out a team whenever anomalies are detected. The officials explained that the invigilation exercise embarked on by GRA over the past few weeks to check compliance is necessary. “The officers will cross-check receipts and record the sales, so that at end of the week they will tally and compare them with returns on the taxpayer files. Invigilation is part of our compliance tools,” Mrs. Owusu revealed. The Ghana Revenue Authority says these initiatives being undertaken will not only improve revenue collection on their part, but also improve business processes.