GRA charged to leverage on technology to increase tax revenue

The Ghana Revenue Authority (GRA) has been charged to take advantage of the numerous opportunities afforded by technology to increase the tax to GDP ratio, and thereby help reduce the country’s dependency on aid and donor support.

“The country’s tax to Gross Domestic Products (GDP) ratio, which is quite alarming, hovers around 16% and is much lower than it should be – and that poses a challenge to the economy. Ideally, the economy should be looking at a tax to GDP ratio of about 22% to 25%.”

Professor George Gyan-Baffour, Minister of Planning, said this on behalf of President Nana Addo Dankwa Akufo-Addo at the 38th annual Commonwealth Association of Tax Administrators (CATA) Technical Conference, hosted by the GRA in Accra.

The ongoing five-day CATA conference, themed ‘Leveraging Technology to enhance Revenue Administration’, is meant to engage fruitful discussions and exchange best experiences for embracing technological innovation in the day to day operation of the revenue administration. It is also an opportune time for tax administrators to catch up with how best information technology may be utilised to transform the various functions of respective revenue administrations.

Prof. Gyan-Baffour explained that due to the inherent advantages associated with leveraging technology to enhance the performance of tax administrations, government will continue to give the needed support and encouragement to GRA to adopt the necessary technological innovations that enable it to deliver the goods.

He added that government recognises the challenges GRA faces in its attempt at casting the tax net wider to embrace as many operators as possible, especially from the informal sector.

As part of the solution, he indicated that government has already leveraged technology to introduce a digital property-addressing system, and will soon introduce a national identity card system.

“We believe that these, among other measures, will help formalise the economy and help the tax administration body to easily locate businesses and potential taxpayers for registration and delivery of assessments.”

He said government abolished a number of taxes while others were reduced in the 2017 budget statement, to give breathing space to businesses as a way of encouraging productive activities.

This strategy was aimed at moving away from the imposition of numerous taxes so as to encourage production and release the business sector’s energies.

“It is my belief that businesses should first be given the opportunity to grow before governments take their fair share of taxes,” Prof. Gyan-Baffour said.

Finance Minister Ken Ofori-Atta, admitting that the country’s current tax to GDP ratio is much lower than it should be, confirmed that the situation poses a serious challenge to the country’s economy.

Mr. Ofori-Atta said: “We are in the middle of our budget season, and the budget will be read on November 15; the challenges are obvious to us in terms of where we are as a nation. We need to find new ways of generating revenue, particularly since government is losing so much money through the abolishment of a number of taxes.

“As part of the modernisation and reform process, government announced a series of reforms in our 2017 budget statement.

“Arising from these reforms, some taxes – actually 13 or 14 taxes – were abolished while others were reduced significantly…But to continue with this type of reform of reducing taxes there is a need for us to find effective ways of raising revenue – mobilising through technology,” he said.

He indicated that the relationship between technology and tax administration will help Commonwealth tax administrators enhance revenue administration, and thereby improve revenue mobilisation.

Mr. Emmanuel Kofi Nti, Commissioner-General of the GRA, urged current tax administrators in the Commonwealth to see it as a duty to pass on to future generations a more robust, functional, progressive and result-driven organisation.

He indicated that CATA’s mission of helping member-countries to develop effective tax administrations to promote sustainable development and good governance is very much in sync with the modernisation efforts of GRA.

“GRA has since its establishment in 2009 embarked on a series of tax, administrative, structural, procedural and process reforms aimed at modernising the Ghanaian tax administration and improving service delivery to taxpayers,” he said.

Chairman of CATA, Mr. Sudhamo Lal said: “The vast majority of people are doing their personal and business transactions on-line. The new generation of taxpayers no longer considers paper-based channels as the most effective and efficient way of communicating and transacting with tax administrations.

“Taxpayers are always in search of new services, and if tax administrations are not able to meet their expectations it is feared that we may end up with tax compliance issues.

“By meeting taxpayers’ expectations through technologically-accustomed officers and simplifying their service delivery experience, then these taxpayers should find it easier to comply.

“These new services can take various forms such as e-filling of tax returns, e-registration, e-payment, e-objection or automated telephony systems amongst others,” Mr. Lal remarked.