457 companies owe GHS4.4bn in tax revenue

Finance Minister, Mr. Ken Ofori in a group photo with the GRA Boss, Mr Emmanuel Kofi Nti, M&G Pharmaceuticals CEO, Gopal Vasu and other officials at the event

…GRA to chase defaulters

About 457 companies operating in Ghana, currently owe duties estimated at GHS4 billion, with other companies in the Domestic Tax Revenue Department, owing GHS 400 million, Finance Minister, Ken Ofori-Atta has disclosed.

He said the Ghana Revenue Authority, in an attempt to recoup such monies, sent letters to about 112 of the companies but nothing was achieved.

The Minister expressed worry that though the GRA is continuously doing its best to ensure that tax payers comply with regulations concerning tax payment, most companies remain adamant to comply.

Speaking to the Goldstreet Business at an engagement forum with 100 top tax payers in the country, Mr. Ofori-Atta said, “there was the need to do more to increase tax compliance through strict enforcement. We need to sit down to negotiate getting this debts paid by the institutions involved.”

Out of six million individual tax payers nationwide, less than 30 percent of the number are registered with the GRA. Of the six million, approximately 1.2 million work as employees.

Value Added Tax penetration ratio currently stands at 11 percent, far below an expected penetration rate of 22-25 percent.

Ghana’s top 15 debtors, with their principle and penalties and interests, sums up to GHS3 billion. Out of 888 PAYE companies nationwide, about 540 of them, comprising 67 percent pays regularly, with 350 having issues with regard to compliance, with the rest 223 making no attempt to file.

“The calculations clearly show that we are not doing well. The country currently derives GHS10 billion from VAT each year, but that could have doubled if companies are complying,” the Minister maintained.

He however said, introduction of the TIN registration by the GRA was initiated to bring an inclusive adherence to tax compliance, particularly for large tax payers.

Mr. Ofori-Atta mentioned that a number of measures are in the pipeline and will soon be executed to ensure that Ghana derives maximum gains from taxes.

“The GRA and MoF will review the exemptions rule for mining companies to block the loopholes. We’ll also block the inbound leakages from the Customs area as they do not have full oversight of the goods that arrive in the country; scan machines frequently break down due to manipulations or are of poor quality,” he said.

Going forward, Mr. Ofori-Atta said a strict enforcement and prosecutions will take place, adding, “absence of a structured process in the domestic tax area for pursuing non-compliant tax payers has become a bane.”

Such anomalies, he added, gives room for rogue officers of the GRA to become extortionists.

“Such officers usually become sad when they are transferred to other departments and units,” he averred.

GRA’s Commissioner General, Mr. Emmanuel Kofi Nti, said the authority should have been doing better than it is currently performing.

“We can only perform with cooperation from the public and our stakeholders. There’s the need to significantly increase revenue mobilization to meet the country’s growing expenditure,” he said.

He cautioned that the days of impunity about non-compliance with the tax laws are over, adding, “GRA will henceforth go after tax defaulters and evaders with the full application of the tax laws as the grace period granted through the tax amnesty having expired.”

By Wisdom Jonny-Nuekpe