GRA to end migration to E-VAT system by December 2024
The Ghana Revenue Authority (GRA) has announced the implementation of the Electronic Valued Added Tax (E-VAT) system, an electronic invoicing system aimed at transforming the manual invoice issuance process into an electronic format. The system, which is expected to promote a fair and equitable VAT regime, will be fully implemented by December 2024.
According to Philip Acquah, the Assistant Commissioner in Charge of Value Added Tax Administration at GRA, the E-VAT system will allow for invoices, including debit and credit notes, to be exchanged electronically, and GRA will authenticate and validate invoices issued by taxpayers in real-time. This process eliminates the bottlenecks associated with the current paper-based system, such as forgery, lack of data for effective compliance, ‘carding’ of invoices, and significant man hours spent auditing.
The implementation of the E-VAT system began with a pilot phase involving 50 taxpayers across different sectors, which was completed in October 2022. The government has since commenced Phase One of the implementation process with 600 taxpayers in the same industries/sectors, and it is scheduled to end in June 2023. Phase Two of the implementation is projected to begin in December 2023.
Despite the expected benefits of the E-VAT system, such as improved documentation and record-keeping, streamlined VAT refund processing, and reduced compliance burden, there have been reported issues regarding the efficiency of the system, such as system downtime and lack of response. However, the GRA has stated that technical remote assistance is being provided to address taxpayers’ issues in real-time, and the system’s capabilities have been refined following the pilot test.
The Ministry of Finance has clarified that the change in the law was not meant to disadvantage businesses but rather to spread the onboarding of businesses onto the system over a year. Daniel Nuer, the Head of Tax Policy at the Ministry of Finance, stated that the law’s change was to allow the Commissioner General to continue his duties, and businesses will be notified of their migration to the electronic system after the completion of the first batch.
The E-VAT system is expected to improve revenue generation, reduce budget deficits and make businesses more efficient and compliant. Non-payment of taxes is a criminal offense, and the government is enforcing the law through criminal prosecutions because civil prosecutions have not yielded the desired results.
The announcement of the E-VAT system was made during the Quarterly Tax Dialogue Seminar Series on the implications of the E-VAT on businesses in Ghana, hosted by the UK-Ghana Chamber of Commerce in partnership with PwC Ghana. The seminar covered other pertinent topics, such as the publicisation of migration guidelines and third-party invoicing.
The E-VAT system is expected to bring significant benefits to businesses and improve the efficiency of the VAT regime in Ghana. While there have been reported issues with the system’s efficiency, the GRA is providing technical remote assistance to address these issues. The Ministry of Finance has clarified that the change in the law was not meant to disadvantage businesses, and the E-VAT system is expected to improve revenue generation and make businesses more compliant.
