A delegation from the Ghana National Chamber of Commerce & Industry

(GNCCI) paid a courtesy call on the Commissioner General of the Ghana Revenue Authority, Mr. Emmanuel Kofi Nti on Tuesday, 2nd April, 2019. The courtesy call was to engage the GRA on some key tax issues affecting businesses, explore areas of collaboration to improve tax administration, and commend the leadership for the work done so far.

The delegation from the Chamber comprised Nana Dr. Appiagyei Dankawoso I (President, GNCCI), Mr. Clement Osei Amoako (1st Vice President, GNCCI), Mr. Mark Badu Aboagye (CEO, GNCCI), Mr. Isaac Barry (Chairman, Tema Chamber of Commerce & Industry), Mr. Wilson Atta Krofah (Council Member & former President, GNCCI), Mr. Julius Bradford Lamptey (Head, Research & Advocacy, GNCCI), and Ms. Cynthia Mensa (Special Assistance to the President, GNCCI)

In his remarks, Nana Dr. Appiagyei Dankawoso commended Mr. Nti and his team for the improvement in the port operations following the implementation of the paperless system. The President also commended the GRA’s cooperation in implementing the recommendations of the Chamber’s advocacy on streamlining the duty drawback process. The timely response in paying overdue duty drawback and significant efforts in addressing the technical challenges have ensured improved confidence in the process. The president also lauded the mutual relationship between the Chamber and the GRA in the execution of the Certificate of Origin.

The president of the GNCCI highlighted that it is the private sector that pays tax and not government and as such to improve tax revenue will require engagement with private sector players. He proposed that “the GRA should recognize the GNCCI as a partner in informing, educating, training its members on tax issues and policies of GRA including tax holidays, tax waivers, and tax violations. Signing a cooperation agreement with the GRA covering areas for collaborations and interventions for SME members will be appreciable”. The president also suggested a collaboration with the GRA to sensitize the business community on tax audits as there is lack of awareness.

Touching on some issues, the president noted that there are some officers who are still requesting for hard copy documents at the port terminals and there is only one Senior Chemist at the Old Scan serving about three terminals resulting in undue delays. He also mentioned that the GRA need to collaborate with the banks to aid in payment and collection of tax to minimize time spent in visiting GRA offices to make payment and file return. For instance, LTO taxpayers have to commute all the way to the VAT House at Circle. He further pointed out that there is lack of awareness on tax incentives for businesses that provide mentorship for business start-ups, internships and employment.

Another major issue highlighted was the review of the VAT system in July 2017. Mr. Krofah indicated that the 3% flat rate VAT review is negatively impacting businesses. For the very first time in 25 years of operation, his mines support service recorded losses. The current VAT regime does not allow for the transfer of the 17.5% VAT to the final consumer which has to be absorbed by businesses. Further, businesses will have to charge 3% output VAT increasing the price of the product in question. This new VAT regime is making local businesses uncompetitive. To stay price competitive, businesses will have to significantly cut back their profits which has implications for business growth, employment, tax revenue and sustainability of businesses.  

Mr. Nti expressed his appreciation to the Chamber for the courtesy call and commended the Chamber’s willingness to partner the GRA in improving tax administration in Ghana. The Commissioner General noted that “tax is divine work, a means to creating equity and equality” and thus everyone should be part of the tax system. He opined that instead of having tax exemptions for certain category of workers or people, there should be a token system to ensure that each and every one contributes to tax revenue generation in Ghana. He also supported the idea of widening the tax net however, the cost of collection needs to be justified.

Commenting on the effect of the 3% flat rate on businesses, he stressed that no company should be crippled by this new VAT regime. The Commissioner General emphasized that it is the agenda of government to create a conducive business environment, encourage production before taxing and so it is not in the interest of the GRA to see taxpayers burdened. He assured that though as an implementer of government’s policies, the GRA will provide feedback to Government on this issue.

He also took the opportunity to clarify tax audit indicating the fact that once a local tax officer comes to audit the account of a business does not mean the end of the tax audit, since it is a continuous process to forestall any compromises. He admitted the lack of synchronization of the tax audit and looked forward to a better approach.  In conclusion, the Commissioner General congratulated the Chamber for the initiative to partner the GRA and looked forward to a regular interaction towards addressing tax issues.

Source: Julius Bradford Lamptey

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