GRA descends on tax evaders… to collect 12.5% VAT upfront from non-registered importers beginning June 6

The Ghana Revenue Au­thority (GRA) will from June 6 this year impose an upfront 12.5 per cent tax on the value of goods imported by per­sons who are yet to register for tax with the Authority.

According to the Authority, im­porters of taxable goods who are not registered with the Authority for tax will in addition to import duties and taxes, pay in advance the Value Added Tax (VAT) on the total value of the goods imported.

The move, Mr Edward Gyam­brah, Commissioner of the Domestic Tax Revenue Division of the GRA, said, was in line with the amendment of the VAT Act 2013 (Act 870) which provided for the upfront payment of VAT by unregistered importers.

He was speaking in Accra on Thursday during an engagement with the media on the implemen­tation of the 12.5 per cent upfront payment.

Explaining further, he noted that the law, which was passed in 2020, was to ensure parity in the pricing of goods on the market as well as establish fairness as VAT registered taxpayers charge the tax on their imported goods.

Mr Gyambrah said it would help identify unregistered importers of taxable goods who do not charge VAT on their goods for sale.

Additionally, he stated that, the move would enhance tax compli­ance as importers of taxable goods would be required to register with the GRA and file their tax returns.

“The upfront 12.5 VAT payment is a compliance tool and not a new tax. We are only asking import­ers to comply with the law that provides that all importers should register with the GRA before doing business. All businesses that are tax compliance will not be affected,” he added.

Mr Gyambrah noted that the upfront VAT payment could be recovered when the importers finally register with the GRA, file their tax returns and pay all taxes due the state.

Ahead of the implementation of the amended law, he said the GRA had engaged various stakehold­ers including the Ghana Union of Traders Association (GUTA), Association of Ghana Industries (AGI), Institute of Freight For­warders, and Custom Brokers As­sociation of Ghana among others.

As part of efforts to meet the Authority’s GH¢106 billion reve­nue target for the year, he stated that, the GRA was embarking on various initiatives including e-VAT invigilation, mystery shopping, while the tax net had been wid­ened to cover the gaming, betting and lottery industry and the night market economy.

Also, he said the GRA had intensified the prosecution of tax defaulters to deter businesses and individuals from evading taxes.

“All these moves are geared towards increasing the contribu­tion of VAT to our country’s tax receipts. We have the lowest VAT contribution on the continent. Currently, VAT makes up less than 20 per cent of the total tax receipts while our neighbours are recording between 36 and 50 per cent VAT contributions,” Mr Gyambrah added.

Mr Wiseborn Koranteng, a member of the technical commit­tee for the implementation of the upfront payment of VAT, said, per the law, businesses that fail to register for tax with the GRA were liable to a penalty that was two times the amount of tax on taxable goods from the time they were required to apply for registration until they filed an application for registration with the Commission­ers General of the GRA.

He explained that, the upfront payment of VAT was applicable to taxable goods imported into the country for home consump­tion, taxable uncustomed goods forfeited and auctioned and taxable goods on transfer from bonded facilities.

However, he said, the law provided that the upfront pay­ment could be recovered within six months after the importer had registered for the tax and filed a return.

 BY CLAUDE NYARKO ADAMS