The Commissioner-General of the Ghana Revenue Authority (GRA), Mr Emmanuel Kofi Nti, has stated that the authority will begin taking more drastic action against persons and organisations that refuse to fully honour their tax obligations with effect from next year.
According to him, the authority, in its quest to re-educate the public about their obligations, has strategically adopted a method to drum home the need for persons to pay taxes while putting measures in place to firm up its policies and programmes to ensure voluntary compliance this year.
Speaking to a core of journalists as part of the authority’s intensified educational programme, he said: “We have seen some loopholes in the system and we are correcting them. We have realised that many do not know what to do so we are using our educational programme this year to sensitise them all to their obligations.”
According to him, after all that had been done this year, there would be no room or excuse for anybody to refuse to honour his/her obligation to the state, “and that is where we will intensify the prosecution of defaulters”.
On the Tax Identification Number (TIN), Mr Nti urged persons who were yet to register to take steps to do so because the process began the enforcement of the law.
He said with effect from April 1, 2018, a person without the TIN, an 11-digit unique number given to identify taxpayers and enable the GRA to credit them whenever they paid their taxes, could not open a bank account, file a case in court, acquire a passport or obtain a driver’s licence.
According to him, the person would also be unable to register a vehicle, clear goods in commercial quantities from the ports or register any title to land or any document affecting land.
Other services for which the TIN is needed include registration of company at the Registrar General’s Department or any District Assembly office; receiving any payment from the Controller and Accountant General or a District Assembly in respect of a contract for the supply of any goods or provision of any services.
Mr Nti said the TIN was to broaden the tax net to capture all potential taxpayers and afford the revenue administration the ability to monitor all transactions entered into by taxpayers.
He said in accordance with the Revenue Administration Act (RAA), a person shall show the TIN in any claim, declaration, notice, return, statement or other document used for the purpose of a tax law.
The RAA also provided a list of institutions to which the TIN applied, including the GRA, the Controller and Accountant General’s Department and the Lands Commission, among others.
Mr Nti indicated that the GRA had waived interest payment and penalties on tax defaulting companies and individuals as part of measures to encourage full compliance.
Subsequently, it asked the defaulters, those already in the tax system and the ones yet to register with the GRA, to take full advantage of the amnesty granted until the end of September this year to avoid sanctions.
Explaining the difference between the tax amnesty granted in the past and what had been announced recently, he said: “For those companies and individuals who are already in the tax system of the GRA but have not been able to honour their tax obligations, they will not be made to pay any penalties on the amount owed.”
Again, he noted that that category of defaulters would also not be made to pay any interest on the money owed the state, “they will only pay what they owe, which is the principal, and that will be all”.
He added that for those who had not been able to register at all with the GRA in the years 2014, 2015 and 2016, they would not be required to pay penalties, interest or the real amount due the state.
Broadening tax net
On the back of calls for the GRA to find more pragmatic means to broaden the tax net to reduce the burden on those already captured, the GRA insists that the amnesty granted is one of the ways to widen the net.
It said with the amnesty granted, it expected more companies and individuals to honour their obligations according to the law.
The GRA insists that while it will not relent in enforcing the laws to ensure that companies and all income-earning persons comply fully to honour their obligations, it will also use persuasion and constant reminders and education to get people to live up to their civic responsibilities to the state.
The GRA is expecting to raise between GH¢300 million and GH¢500 million for the government from the tax amnesty programme.
This year, the GRA has a tax revenue target of GH¢39.8 billion and there are discussions to increase the amount by GH¢1 billion.
In 2017, the authority failed to meet its target as it raked in GH¢ 32.3 billion and registered a shortfall of GH¢1.1 billion.
This is not the first time Ghana is granting tax amnesty to tax defaulters. In October 2012, Parliament passed the Internal Revenue (Tax Amnesty) Bill, 2011, granting a reprieve to tax defaulters and seeking to widen the income tax net to improve Ghana’s revenue inflows.