Okaikwei Central MP calls for urgent reform of GRA’s interest and penalty regimes

Patrick Yaw Boamah, the Member of Parliament for Okaikwei Central, has petitioned the Minister of Finance over what he describes as urgent structural and operational challenges in the application of interest and penalty provisions under the Revenue Administration Act, 2016 (Act 915).

The Okaikwei Central legislator, therefore, called for immediate policy and legislative reforms to address these challenges.

Addressing journalists at the Parliament House in Accra, Mr Boamah, also Chairperson of the Subsidiary Legislation Committee, noted that while Act 915 was a landmark in modernising Ghana’s tax administration and strengthening the Ghana Revenue Authority (GRA) to enforce compliance, its practical implementation has revealed unintended consequences.

He warned that the current interest and penalty framework risked eroding taxpayers’ confidence, undermining economic productivity, and discouraging voluntary compliance.

The legislator highlighted three key provisions that have created what he termed a “Revenue-Penalty Trap.”

He noted that the interest rates of up to 125% of the Bank of Ghana’s Monetary Policy Rate, monthly compounding of interest and retrospective application of interest from the original due date of tax liabilities as problematic.

He said when these provisions are combined with extended audit timelines and adjusted assessments issued years after the relevant tax period, taxpayers often face liabilities that far exceeded the principal tax owed.

In many cases, cumulative interest and penalties have become disproportionately burdensome for companies.

Boamah further raised concerns about alleged abuse by some tax enforcement officers, claiming that certain officials harass firms and discreetly extort money from companies struggling to meet their tax obligations.

He argued that such practices not only damage the integrity of Ghana’s tax system but also discourage investment and business growth.

He urged the Finance Ministry to review the interest and penalty regimes under Act 915 to ensure fairness, transparency, and sustainability in tax administration.