2 Years after e-VAT: GRA slow to sign on businesses - Low compliance amid revenue leakage

More than two years after the introduction of the electronic Value Added Tax (e-VAT) invoicing system by the Ghana Revenue Authority (GRA) to streamline tax compliance and curb revenue leakages, many retail outlets, restaurants and hotels across the country continue to operate outside the system.

Out of tens of thousands of businesses registered to collect VAT and issue e-VAT receipts, the GRA has migrated only a handful onto the system so far, with varying degrees of compliance.

A Daily Graphic mystery shopping and investigation revealed that very little has been done to bring to the platform those who collect VAT and other levies, such as the National Health Insurance Levy and the GETFund Levy on behalf of the GRA, hence the situation.

It came out that some of the businesses were refusing to issue the e-VAT receipts outright, while others bypassed the system with unauthorised computer-generated receipts.

The checks indicated striking differences between e-VAT-compliant receipts and those that are non-compliant.

The e-VAT certified receipts have special codes, such as the QR code, that enable GRA to verify the genuineness of the receipt.

Mandatory

The Value Added Tax (Amendment) No. 2 Act, 2022 (Act 870) requires all eligible companies and outlets to integrate their billing and receipting systems with a designated GRA platform to ensure tax compliance.

In spite of the e-VAT’s proven record of ensuring significantly higher revenue collection, it is still not being rolled out in full, although the government needs it to fill the revenue gap, following the slashing of taxes.

Since the pilot phase in 2022 when 50 of the retail outlets were onboarded till the rollout stage last year when a few hundreds more companies were added to the e-VAT receipt issuers, GRA VAT collection from such outlets saw a huge jump of more than 10 folds, Daily Graphic sources, who pleaded condition of anonymity, have revealed.

However, the Daily Graphic checks reveal that compliance remains low, as only a fraction of eligible businesses have adopted the system.

Many still rely on GRA’s paper VAT receipt booklets, which often leads to non-compliance, particularly since some outlets only issue VAT receipts when customers insist on having them. 

Govt loses revenue

The GRA’s inability to move quickly and implement the electronic VAT system comes on the back of the government having reduced some major taxes, which straightaway knocks out about GH¢6 billion in revenue.

They include the Electronic Transfer Levy (e-Levy), the betting tax and the recalibration of how levies such as NHIL, GETFund Levy and COVID-19 levies are computed, which reduced the burden on the consumer, but at the same time led to the government losing some revenue.

Under the IMF programme, the country is expected to shore up its domestic revenue mobilisation to about 20 per cent of Gross Domestic Product (GDP).

During the Monetary Policy Committee press conference last Friday, the Governor of the Bank of Ghana, Dr Johnson Asiama, said: “In the first quarter of 2025, provisional data on budget execution indicated that although revenues fell below target, some expenditure rationalisation took place to accommodate the revenue shortfall.”

Experts at a National Dialogue organised by the University of Professional Studies, Accra (UPSA), agreed that the nation's struggles with tax revenue leakages would be substantially reduced through technology integration and data synchronisation across government agencies.

The panel, which featured specialists from academia, tax practice and the mining sector, unanimously endorsed technology as the solution to the country's persistent revenue collection challenges.

"Technology is the way to go," a tax expert and Associate Professor at the University of Ghana School of Law, Abdallah Ali-Nakyea, said.

“The Ghana Revenue Authority (GRA) has done very well with automation, making it very easy to file your returns online and get your tax clearance. One key area is how to let our network speak to other institutions," Prof. Ali-Nakyea, who is also the Director of Ali-Nakyea & Associates, stated.

It is not clear what is holding back the e-VAT roll. When contacted, the GRA declined to comment on the issue.

Mystery shopping

The Daily Graphic mystery shopping indicated that while a few major retailers, such as Shoprite and Melcom, were found to be fully compliant during the paper’s investigation, many other eligible businesses have either failed to integrate the e-VAT invoice or after coming on board refused to issue e-VAT receipts on the blind side of revenue collection officials.

More than 60 eligible companies checked during our investigation, including Starlite Company, Pizzaman Chickenman, Mr Wu’s Limited, Shell Dansoman, Noble House Hospitality Services Ltd and A. Z. Department Store, were not found on the platform.

Some of them, however, had a letter from the GRA permitting them to “use their own Computer-generated invoice”. 

GRA delay

In an interview with the Daily Graphic, Melcom's Group General Manager, Francis Sam, stated that the GRA had not followed its timeline to onboard additional companies onto the e-VAT system, despite assurances to do so over a year ago.

He argued that the delay had created an unfair tax burden, as the GRA continued to focus enforcement on the small number of businesses already complying with the e-VAT directive, leaving others unchecked.

Mr Sam said that approach had led to imbalances with the compliant businesses having a sense of victimisation within the industry.

As many businesses still rely on manual receipts, often only issuing them upon customer request, he said, loopholes for underreporting sales and tax evasion had been created, leading to unfair trade competition among compliant businesses and non-compliant ones.

Mr Sam observed that the GRA faced a critical challenge in ensuring widespread adoption, as persistent non-compliance weakened the effectiveness of the e-VAT system.

A former Trade Officer at the Ghana Free Zones Authority, Terry Davidson, told the Daily Graphic in an interview that the reluctance to properly record and remit collected taxes severely undermined tax transparency and enforcement.

Mr Davidson, who was in charge of ensuring that Free Zones companies complied with the law that mandated them to export 70 per cent of their products, said when businesses flouted tax laws, including tax holiday laws or collected taxes from customers and failed to document them in official records for transmission to the state, they effectively withheld revenue that rightfully belonged to the state.

“This does not only deprive the government of critical funds but also weakens compliance efforts, as unrecorded transactions escape scrutiny,” he said.

Mr Davidson insisted that without accurate tax records, authorities faced significant challenges in detecting and addressing evasion, perpetuating a cycle of non-compliance and lost public revenue.

Background

The Value Added Tax (Amendment) No. 2 Act, 2022 (Act 870) stipulates that all registered taxpayers for VAT must be onboarded onto the new e-VAT platform to exclusively issue electronically signed invoices to customers for all sales transactions.

The Daily Graphic sources suggest that the e-Vat covered all taxpayer sizes and scenarios, from the large companies and entities with their own Enterprise Resource Planning (ERP) systems such as Melcom, ShopRite and Palace Mall, to the smaller ones who do not have any systems and may want to run online in the cloud or offline on their desktop computers or mobile phones.

The GRA at the start of the pilot said it would work with Ghanaian software vendors so they could have their systems e-VAT-ready.