Illicit Financial Flows Undermine Tax Compliance, Threaten Business Sustainability – GRA Boss
The Acting Commissioner-General of the Ghana Revenue Authority (GRA), Anthony Sarpong, has underscored the grave threat posed by illicit financial flows (IFFs) to the country’s revenue mobilization efforts and the sustainability of legitimate businesses.
Speaking during an X-Space discussion co-hosted by The High Street Journal, NorvanReports, and IMANI Ghana, under the theme “Resetting Ghana’s Revenue Mobilization,” Mr. Sarpong stated that IFFs whether in the form of smuggled goods or unreported capital movements, not only erode the country’s tax base but also distort the competitive landscape for law-abiding businesses.
“This is not only a tax issue but a matter of survival and growth of our national economy through businesses,” he stressed, adding, “Smuggled goods, for instance, do not pay the requisite taxes, creating a competitive imbalance between compliant businesses and those evading tax.”
He warned that if unchecked, IFFs could result in job losses, as tax-compliant businesses may struggle to remain profitable and expand. “If their businesses do not grow, then automatically as business entities, they are likely to shed employment,” he noted.
The GRA, according to Mr. Sarpong, is intensifying collaboration with security and regulatory agencies to combat the menace. “We already have in place a committee comprising the National Security, Immigration Service, the Financial Intelligence Centre (FIC), and other agencies,” he disclosed.
He explained that the GRA’s preventive systems help detect tax infractions, which are then handed over to institutions like the Economic and Organised Crime Office (EOCO) for investigation, allowing the Authority to subsequently recover owed taxes.
The Acting Commissioner-General indicated that addressing IFFs is a critical component of the GRA’s long-term strategy. “If we don’t tackle this area, our businesses and individuals who are paying their taxes will be challenged, their businesses will dwindle, they will not be sustainable, and ultimately, the source of tax income will go down.”
Illicit financial flows remain a persistent challenge in Ghana, particularly within the extractive sector, where trade misinvoicing is prevalent. Estimates by the Tax Justice Network Africa reveal that Ghana loses approximately $1.4 billion annually through IFFs.
As Ghana intensifies efforts to broaden its tax net and improve revenue generation, tackling illicit flows will remain a priority to ensure equity, fairness, and sustainability in the business environment.
