Increasing Revenue: new E-VAT policy to bring in GH¢750mn
Adnan Adams Mohammed
As Ghana’s budgetary expenditure continuously outweighing its revenue, widening the fiscal deficit, the government has introduced a new revenue generation policy, the E-VAT.
By the new E-VAT, the government seeks to raise GH¢750 million if the Value Added Tax Amendment bill, which introduces the E-Vat policy, is passed by parliament.
The tax measure broadens the scope of the existing laws to cover electronic commerce, provides for the electronic issuance of a tax invoice, upfront payment of Value Added Tax by an unregistered importer and the zero-rating of the supply of locally assembled vehicles.
A report of the Finance Committee of Parliament indicates that the e-vat policy addresses issues of inequalities and compliance in the payment of tax.
During the mid-year budget review, the GRA said it was finalising all relevant processes to facilitate the effective collection of VAT revenue including the proposed amendment of the Value Added Tax Act 870 to enable its electronic collection, effective October 1, 2022.
The Ministry of Finance has had to downgrade its projection of revenue expected from the controversial e-levy to GH¢611 million from the earlier projected $1.6 billion.
For the Value Added Tax (VAT), the expected revenue was adjusted upwards from the initial GH¢14,534,864,446 to GH¢15,402,925,770.