The Ghana Revenue Authority (GRA) has deployed an electronic (e) invoicing system for businesses to use in issuing value-added tax (VAT) invoices to the public.
Known as the e-VAT invoicing system, it took off last Saturday after Section 42 of the VAT Act, 2013 (Act 870) as amended to make electronic invoicing (e-invoicing) the sole medium for issuing VAT invoices.
The system is to enable GRA to counter the various malpractices that the GRA said were denying the state billions of cedis in tax revenue.
Since VAT is a consumption tax, the electronic system will allow most of the population to contribute to the tax basket and answers calls for the tax next to be widened.
Under the first phase of the implementation, the exercise will cover more than 600 large taxpayers, including listed companies, which account for more than 80 per cent of domestic revenue and up to 90 per cent of VAT collections.
It is expected to cover all VAT taxpayers by 2024.
The Head of the Domestic Tax Revenue Division (DTRD) at GRA, Edward Apenteng Gyamerah, told a section of the media last Friday that the e-VAT invoicing would also help the authority to monitor transactions in real-time, thereby ensuring transparency and eliminating under-invoicing, under carding and non-issuance of VAT invoices.
He said through the exercise, GRA aimed to raise VAT's contribution to tax revenue to 20 per cent by December this year and 30 per cent in 2024.
Currently, VAT accounts for a maximum of 18 per cent of annual total tax revenue, below the 30 per cent average done by Ghana's peer countries.
Mr Gyamerah said the e-VAT invoicing would be implemented in phases, with the large and high-risk taxpayers being the first to be covered between October and the second quarter of next year followed by medium taxpayers by December 2023.
“Through this e-invoicing and other compliance mechanisms such as the mystery purchases and inspection, we hope to move VAT contribution to tax revenues at par or above what our peers are doing.
“The African average is around 30 per cent but ours is just about 18 per cent maximum and that is not good for us as a country,” he said.
Mode of implementation
On how the e-VAT invoicing would work, Mr Gyamerah said GRA had developed a system that would be integrated into the systems that some businesses currently used to print VAT invoices.
For businesses that GRA had not authorised to use their own systems in generating VAT invoices, he said the authority would provide a free e-invoicing system to them.
With regard to the e-TCC, he said businesses only needed to enter their details into the e-TCC portal for the certificates to be generated automatically.
Mr Gyamerah, therefore, appealed to businesses and the general public to cooperate with the authority to make the exercise smooth.
He said tax payment was critical to national development and it behoved every citizen and corporate organisation to do its part in ensuring that the right revenue accrued to the state.
Mr Gyamerah was optimistic that the successful rollout of the e-VAT invoicing and the e-TCC would help to strengthen transparency and convenience in tax payments.
He said the system allowed GRA to have access to transactions at the backend.
“Then, the e-VAT invoicing system is going to curtail a lot of abuses which the manual system currently has.
“The issue of businesses asking you whether or not you want VAT invoice will be a thing of the past.
“With the electronic invoicing, you are required to pick an invoice and that invoice is the GRA Commissioner-General-certified invoice and the customer has no choice but to pick it,” he said.
The Head of the DTRD warned that customers that failed to pick up the invoice risked being penalised by the law, including suffering a 15-month jail term.
“Also, we are going to extend this invoicing software to taxpayers that are currently not registered as VAT collectors. The result is that we will be able to improve upon compliance and we will have an audit trail of all transactions, making it easier for us to see the volumes of transactions to be able to assess taxes correctly,” Mr Gyamerah said.
Mr Gyamerah explained that the e-invoicing rollout formed part of a tax digitalisation programme by the authority.
According to him, the e-TCC was deployed to all businesses from last Saturday.
The Head of the DTRD of GRA said the programme was aimed at improving compliance by prioritising convenience, efficiency and speed in tax payments.
He said under the tax digitalisation initiative, cashless payments of taxes and online filing of tax returns had been rolled out while the e-VAT invoicing was now being introduced simultaneously with an electronic tax clearance certificate (e-TCC).
He explained that the e-TCC allowed taxpayers to generate their certificates online, thereby eliminating the human involvement that led to the faking of such certificates.