HomeBusinessBusinessE-VAT boosts revenue by 32%

E-VAT boosts revenue by 32%

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The Ghana Revenue Authority (GRA) has refuted rumours suggesting that the piloting of its electronic Value Added Tax (e-VAT) invoicing system has resulted in significant revenue losses for the state.

Instead, GRA clarified that the introduction of the e-VAT system has contributed to a notable 32 percent increase in revenue.

Concerns regarding the efficacy of the e-VAT system emerged on Wednesday, May 8, prompting GRA to issue a statement through its Communications and Public Affairs Department to address the alleged misinformation.

The Authority categorically dismissed the rumours as erroneous, emphasising the positive impact of the e-VAT system on revenue generation.

According to GRA’s statement, the pilot phase of the e-VAT system, which involved 50 taxpayers, concluded successfully, resulting in a substantial revenue boost of GH¢124 million.

According to the GRA, this achievement underscores the effectiveness of the e-VAT system in enhancing tax compliance and revenue collection.

GRA emphasised that the implementation of the e-VAT system is part of its broader strategy to combat tax evasion and streamline tax administration processes.

By digitising VAT invoicing and reporting, the GRA said it aims to enhance transparency, accuracy, and efficiency in tax collection, thereby strengthening the integrity of Ghana’s tax system.

“A highly successful pilot has been completed with 50 taxpayers. The test and pilot phase provided a pathway for successful and seamless E-VAT implementation, which prioritised minimal disruption to taxpayers’ back-office processes.”

“During the Pilot Phase, VAT revenue grew by over 58%, representing additional contributions in excess of GH¢384 million. Electronic VAT invoicing efficiency contributed to a revenue impact of GH¢124 million, accounting for 32% of this increase,” an excerpt of the GRA statement.

Below is the full statement

Update on Progress of E-VAT Implementation

The attention of the Ghana Revenue Authority (GRA) has been drawn to a publication in the Daily Graphic of Wednesday, 8 May 2024, titled “E-VAT in limbo: Retail outlets suck economy dry – Nation loses billions in revenue”.

2. The GRA takes this opportunity to provide clarity on its implementation of the EVAT system. Notably:

i) The rollout of the E-VAT system is being conducted using a phased approach.

ii) The Pilot Phase: A highly successful pilot has been completed with 50 taxpayers. The test and pilot phase provided a pathway for successful and seamless E-VAT implementation, which prioritized minimal disruption to taxpayers’ back-office processes. During the Pilot Phase, VAT revenue grew by over 58%, representing additional contributions in excess of GH¢384 million. Electronic VAT invoicing efficiency contributed to a revenue impact of GH¢124 million, accounting for 32% of this increase.

iii) Phase 1: The initial rollout phase which is currently ongoing, is focused on onboarding large taxpayers who account for 80% of VAT contributions. The revised timeline for Phase 1 is from 22 April, 2024 to 31 May, 2024. Initial results from Phase 1 onboarding have been highly encouraging, with a 175% progress rate so far, as measured against weekly onboarding targets.

iv) Phase 2: The second phase targets the onboarding of medium and small taxpayers by the end of December 2024.

v) Phase 3: The final implementation phase targets the integration of all other VAT registered taxpayers into the E-VAT system.

3. The GRA is confident of the significant positive impact that the E-VAT will have on VAT contributions and takes this opportunity to assure all stakeholders of its steadfast commitment to the comprehensive and rapid implementation of the E-VAT system. The successful rollout of E-VAT is poised to enhance revenue collection, combat tax evasion, and help promote transparency in tax administration, as demonstrated by the Pilot Phase.

4. The GRA takes this opportunity to thank all our clients for their cooperation and partnership as we continue to onboard them onto the E-VAT system.

5. For further inquiries or assistance regarding E-VAT implementation, taxpayers are encouraged to contact their nearest GRA office or visit our website.

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