Tax Expert gives guidelines on how to achieve tax revenue target for 2020
Adnan Adams Mohammed
An
acclaimed Tax Expert is urging the Ghana Revenue Authority (GRA) to as a matter
of urgency start early with tax education, constant and consistent Value Added
Tax (VAT) verification exercises, which should include withholding taxes to
help meet the target as set in the 2020 budget statement and economic policy of
the government.
The
President Akuffo Addo led administration has budgeted for total revenue and
grants of GHC 67.07 billion which is about 16.9 per cent of GDP, made up of GHC
65.8 billion domestic revenue for the 2020 fiscal year. The government’s
Non-Tax Revenue expectation amounts to GHC 13.13 billion, other revenue of GHC
2.87 billion, grants of GHC 1.24 billion and direct project grants of GHC 1.14
billion.
This
looks heavy and daunting job for the GRA as it is already struggling to meet
the 2019 tax revenue targets. The GRA is expected to collect over GHC 45.2
billion by the end of December 2019. Yet, as of September 2019 (three quarters),
it had only collected GHC 28.9 billion. There are clear indications that there
will be a huge shortfall in revenue collection as compared to the target. It is
based on this that, the tax expert has outlined a number of measures as an admonishment to the GRA to implement to help meet the 2020 tax revenue
target.
“GRA
needs to start early with tax education, constant and consistent VAT
verification exercises, which should include withholding taxes”, Mr Abdullah
Ali-Nakyea advised. He added that GRA also need to stop the multiple audits by
different units within the same Authority and be focused on one audit with
members from all interested units so it is a one-stop Audit than the multiple
audits.
“They
also, need to stop the multiple audits by different units within the same GRA
and be focused on one audit with members from all interested units so it is a
one-stop Audit than the multiple audits.
“GRA
has to resort to timely resolution of tax disputes rather than holding on to
disputes for years without resolution because once they close audits they have
the power to reopen a case if they chance upon additional information requiring
a re-audit so they don’t lose anything if they close disputes and collect the
revenue agreed after the objection has been determined.”
The
tax expert alarmed that, the 30% deposit in cases of dispute is, with all due
respect inimical to domestic revenue mobilization and the earlier it is done
away with so, we revert to the administrative resolution of disputes as pertained in
Act 592 before the amendment the better.
“Now
there is no distinction between the administrative resolution of tax disputes and
judicial resolution except one is conducted at the court. The key distinction
used to be the deposit before one’s case could be heard by the court. The use
of 30% as a tool to “forcibly” collect tax does not enhance voluntary tax
compliance and also encourages tax evasion than tax avoidance.”
Mr
Ali-Nakyea further suggested that GRA needs to train and retrain quite a
number of their staff as appreciation of taxation and the tax laws is a
challenge. A number of objections could be avoided if the knowledge gap is
closed.
GRA
has still not appreciated that closing down businesses of taxpayers who owe
them is a “last resort” action because now they use it as the first option to
recover tax. This leads to a lock-up of more tax types like withholding taxes
and VAT because once the person does not operate, no payments are made to
suppliers and we lose the withholding tax and VAT that could have been charged.
I believe there are so many avenues in the Revenue Administration act to
recover tax debts before resorting to garnishment as a last resort so it would
be good we applied these recovery measures.
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