The Ghana Revenue Authority (GRA) says it will prioritise education and engagement over punitive measures as it steps up efforts to improve Value Added Tax (VAT) compliance among businesses across the country.
The Authority says sanctions will be applied primarily in cases where businesses are found to have deliberately refused to comply with VAT requirements.
Commissioner for the Domestic Tax Revenue Division of the GRA, Dr Martin Kolbil Yamborigya, said the approach formed part of efforts to improve taxpayer compliance while avoiding unnecessary disruption to legitimate businesses.
“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 said.
Dr Yamborigya was speaking to the media on the sidelines of the launch of the GRA’s VAT Compliance Campaign after accompanying officials to inspect VAT compliance at some shops at the Accra Mall.
He said the exercise was not designed to harass businesses but to help taxpayers understand and fulfil their obligations under the VAT regime.
“This campaign is not meant to harass businesses and we don’t also intend to disadvantage any business,” he said.
According to him, the initial compliance visits revealed that some businesses were not consistently issuing VAT invoices to customers.
“We realised that they were not religiously issuing VAT invoices and we only encourage them to make sure they do the right thing,” he said.
Dr Yamborigya explained that the Authority could have taken immediate punitive action against the affected businesses but chose instead to engage them and encourage compliance.
“If we were not to show human face, we probably would have called for their arrest immediately,” he said.
He said the GRA’s education-first approach was intended to ensure that taxpayers were aware of their responsibilities and understood the importance of complying with VAT requirements.
The Commissioner, however, stressed that businesses that knowingly and persistently violate the VAT rules should expect enforcement action.
He said the distinction between genuine gaps in understanding and deliberate non-compliance would guide the Authority’s response during the campaign.
GRA targets 30% VAT gap by 2028
Beyond the immediate compliance exercise, Dr Yamborigya said the GRA had set a target of reducing Ghana’s VAT gap from about 60 per cent to approximately 30 per cent by the end of 2028.
He said the target was contained in the Authority’s VAT Strategic Plan and would require significant improvements in compliance and VAT collection.
“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.
He explained that reducing the gap would mean increasing the amount of VAT collected from the existing tax base while ensuring that more businesses and individuals comply with their obligations.
“That means that at least we should be able to collect 30% more in addition to what we are currently collecting,” he added.
Dr Yamborigya said the ultimate objective was to establish a culture in which taxpayers consistently meet their VAT obligations without the GRA having to rely predominantly on enforcement.
“In the long run we expect every Ghanaian to comply so that the tax will be collected,” he said.
The VAT Compliance Campaign is therefore expected to combine public education, taxpayer engagement, monitoring and enforcement as the GRA works towards narrowing the VAT gap and improving domestic revenue mobilisation.
