The Ghana Revenue Authority (GRA) has officially launched a new Compliance and Enforcement unit within its Domestic Tax Revenue Division to address widespread irregularities in Value Added Tax (VAT) collection. Recent assessments by the authority revealed a staggering 60% of businesses are either failing to remit VAT entirely or are doing so incorrectly. Commissioner General Anthony Kwasi Sarpong emphasized the urgency of this initiative, noting that a significant number of businesses collect VAT from customers but fail to transfer those funds to the state, leading to substantial revenue losses for the country.
The newly formed 26-member team is tasked with improving VAT payment adherence and closing the collection gap by the end of the current year. Beyond enforcement, the unit is mandated to safeguard taxpayer rights and promote a culture of voluntary compliance. Dr. Martin Yambourigya, Commissioner for Domestic Tax Revenue, underscored the importance of collaboration between the GRA and the business community, stressing that effective VAT application is a cornerstone for enhancing the nation's overall revenue mobilization.
Simultaneously, the GRA is addressing concerns from the Abossey Okai Spare Parts Traders Association regarding the VAT Act, 2025. Traders had expressed fears that the shift from a 4% flat rate to a 20% standard VAT would lead to a spike in consumer prices. However, the GRA dismissed these claims, clarifying that under the new system, input VAT is fully deductible. Using illustrative examples, the authority demonstrated that total costs to consumers should remain consistent or potentially even decrease, as the previous flat rate did not allow for such deductions.
The GRA has attributed any observed price increases during this period to transitional errors rather than the policy itself. To ensure a smooth transition, the authority announced plans to provide dedicated assistance to traders as they adapt to the new regulatory framework. By combining rigorous enforcement against defaulters with educational support for compliant businesses, the GRA aims to create a more transparent and efficient tax environment that supports Ghana’s economic stability.
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