The Ghana Revenue Authority (GRA) is targeting a reduction in the country’s Value Added Tax (VAT) gap from the current 60% to about 30% by the end of 2028 as part of efforts to improve tax compliance and increase domestic revenue mobilisation.
Commissioner for the Domestic Tax Revenue Division of the GRA, Dr. Martin Kolbil Yamborigya, said the target formed part of the Authority’s VAT Strategic Plan, which focuses on closing compliance gaps and improving VAT collections.
According to our VAT Strategic Plan, we are hoping that between now and the end of 2028 we should be able to close this gap from the current 60% to about 30%,” he said.
Dr. Yamborigya disclosed this when he spoke to the media on the sidelines of the launch of the GRA’s VAT Compliance Campaign, following compliance visits to selected businesses at the Accra Mall.
He explained that reducing the VAT gap would require the Authority to improve collections from the existing tax base by ensuring that businesses and individuals consistently meet their VAT obligations.
That means that at least we should be able to collect 30% more in addition to what we are currently collecting,” he added.
Compliance over enforcement
Dr. Yamborigya said the GRA’s long-term objective was to build a culture of voluntary tax compliance, where businesses and individuals understand and consistently fulfil their VAT obligations.
In the long run, we expect every Ghanaian to comply so that the tax will be collected,” he stated.
He said the ongoing VAT Compliance Campaign was therefore not intended to intimidate or disadvantage businesses, but rather to educate taxpayers and encourage them to comply with the law.
This campaign is not meant to harass businesses and we don’t also intend to disadvantage any business,” he said.
During the compliance exercise at the Accra Mall, GRA officials identified instances where some businesses were not consistently issuing VAT invoices to customers.
We realised that they were not religiously issuing VAT invoices and we only encouraged them to make sure they do the right thing,” Dr Yamborigya said.
He explained that instead of immediately applying punitive measures, the Authority chose to engage the affected businesses and educate them on their tax obligations.
If we were not to show a human face, we probably would have called for their arrest immediately,” he said.
Deliberate breaches to face enforcement
While emphasising education and engagement, Dr Yamborigya said the GRA would not hesitate to enforce the law where it determines that non-compliance was deliberate.
We are going to be more engaging, we are going to be more educative. But where we find out that the non-compliance is deliberate, that’s what we apply,” he stated.
According to him, the approach is designed to give taxpayers the opportunity to understand their obligations and correct mistakes, while ensuring that deliberate breaches of VAT requirements are appropriately addressed.
So we continue to show a human face by ensuring that people know and understand their tax obligations and comply,” he added.
The GRA’s VAT Compliance Campaign forms part of its broader efforts to improve compliance, strengthen domestic revenue mobilisation and reduce losses arising from non-compliance.
Comments