GRA To Implement Unregistered VAT Importers Upfront Payment

The Ghana Revenue Authority (GRA) has announced its intention to take action against unregistered importers of taxable goods.

Upfront payment applies to taxable goods imported into the country for home consumption, taxable uncustomed goods forfeited and auctioned and taxable goods on transfer from bonded facilities.

But upfront payment does not apply to the following types of import, exempt import like VAT Act, 2013, ACT 870 as amended Exemptions Act, 1083, Items imported for personal use or consumption by persons not required to register for VAT and Imports not meant to be consumed in the country such as temporary import, free zones, transshipments, transit cargo, ship-ship.

In a statement, the GRA said it is determined to those found to be importing without proper registration are subject to an upfront payment of 12.5 percent of the custom value of the taxable goods as a penalty.

Also, unregistered providers will face restriction of access in the country until they fulfill their obligations under the Act and Regulation.

However, the law provides that the upfront payment can be recovered after the importer registers for tax and files a return.

Additionally, the law requires unregistered non-resident individuals providing telecommunication and e-commerce services to register if they make a taxable supply.

The update also includes provisions regarding deductible input tax, submission of tax return, and zero-rated supply. The changes are part of the GRA’s efforts to promote digitization and data sharing between those involved in taxable supply and the Commissioner General.

However, experts have cautioned that the E-VAT system cannot be a panacea for under-reporting of taxable supply. They have called for measures to encourage self-compliance, reportage of non-compliant suppliers, and a culture of compliance. It is also necessary to enroll all taxpayers to prevent a significant portion of taxable activities from going unreported, and the E-VAT system should be synched with the database at the port to resolve the issue of under-declaration of import values.

The Value Added Tax Act, 2013 has been amended by the Value Added Tax (Amendment) Act which came into force on 12 September 2022. The purpose of this amendment is to compel taxpayers who qualify to register for value-added tax (VAT) to register on time. The main policy rationale for the provisions introduced by this amendment is to aid tax authorities in Ghana in their effort to tighten the laws to ensure non-resident persons who supply taxable goods or services, register for VAT.

The principal enactment has been amended to provide for the following: the upfront payment of VAT by unregistered importers, the taxation of electronic commerce, the electronic issuance of tax invoices, and the zero-rating of the supply of locally assembled vehicles.