The Ghana Revenue Authority (GRA) from Saturday 1st October 2022 began with the use of a certified invoicing system for the administration of Value Added Tax (VAT) in Ghana. This forms part of efforts to increase tax compliance and generate more revenue for the state.
A Certified Invoicing System is an electronic invoicing system(E-VAT) certified by the Commissioner-General per the VAT Act 870 as amended.
All businesses that have been registered or qualify to be registered to charge VAT. Businesses that operate under the manual VAT invoicing regime would be migrated onto the E-VAT Invoicing system.
The deadline for the registration is dependent on the phased implementation which starts on 1st October 2022. Henceforth, all newly registered taxpayers will be onboarded on the E-VAT System.
The structure of the E-VAT Invoice will be the same across board but taxpayers have the option to change the look and feel of the invoice. For example, The colours, the company logo or invoice number.
The exercise will be done in a phased process that would cover 600 large taxpayers in the first phase.
The 600 firms being targeted under the phase include listed companies and they altogether generate more than 90 per cent of VAT revenue and 80 per cent of domestic revenue.
The e-invoicing exercise is expected to cover medium-sized taxpayers by 2023 before being extended to all businesses in 2024.
Unlike the manual system, the e-invoicing system allows the GRA to monitor live transactions in companies where it has been deployed, thereby making it impossible for taxpayers to either under invoice or dodge the payment of VAT.
GRA estimates show that the country’s VAT contributions to tax revenue could be increased to 30 per cent from the current 18 per cent if the various abuses that the manual invoicing system is prone to are decisively dealt with.
The system was rolled out simultaneously with an electronic tax clearance certificate (TCC) system that also seeks to remove the abuses the current system is prone to.
The Head of the Domestic Tax Revenue Division (DTRD) at GRA, Edward Apenteng Gyamerah, told Citi Business News that the two programmes formed part of a tax digitalization agenda being championed by the authority.
He said the authority was optimistic that the e-invoicing and the e-TCC would help increase revenue generations by removing the malpractices that the manual systems have been subjected to.
Mr. Gyamerah said together with the e-invoicing, the GRA was hoping to raise VAT contribution to total revenue from the current 18 per cent to 30 per cent by 2024.
He said while VAT collections in Ghana’s peer nations amounted to 30 per cent per annum, that of Ghana was around 18 per cent.
To help deal with this, the Head of DTRD said the authority and government amended Section 42 of the VAT Act, (2013) Act 870 as amended to make e-invoicing compulsory and the only medium for issuing VAT invoices.
“Through this, we will be able to improve upon compliance, we will have audit trail and that will allow us to know the volume of transactions every minute for us to assess the taxes appropriately” he said.
Speaking on the node of implementation, Mr Gyamerah said the system would be deployed using two different routes.
He said for businesses that have their own platform for issuing VAT, GRA connect its software for generating the e-VAT invoices into theirs to allow for take off.
But for businesses that do not have their own systems, he said the authority would give its software to them at no cost.
On the e-TCC, he said businesses only needed to enter their details into the e-TCC portal created by GRA for the certificates to be generated automatically.