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An efficient tax revenue system

Article - February 18, 2014
The Ghana Revenue Authority is making revenue collection more streamlined and efficient, whilst increasing tax-to-GDP ratios yearly
Up until 2010, paying taxes in Ghana could be quite an ordeal. There were several revenue agencies operating autonomously and each one required that taxpayers filed separate forms. Audits followed a similar pattern, with different organisations sending their own agents to audit companies’ and individuals’ books.
Four years ago, the government effectively tidied this up by merging the various agencies into one, called the Ghana Revenue Authority. This new entity was mandated with managing and modernising domestic tax and customs operations, and integrating the Internal Revenue Service and VAT Service into the new Domestic Tax Revenue Division of the GRA
“The GRA is a key part of the steps to enhance performance and efficiency in the revenue organisation in this country,” says George Blankson, Commissioner General of the GRA.
“We are at the domestic front merging all the offices to make them a one-stop shop, instead of the previous system under which the taxpayers paid VAT in one office and then went to pay income tax in another. 
“The system is being scrubbed and in its place we are establishing one-stop shop integrating the domestic tax offices, so that in the same office the taxpayer can attend to his tax affairs of income tax and also excise duties, VAT, etc. – an all-in-one integrated office. This ensures that there’s greater convenience in terms of tax on the part of the taxpayer.”
Mr Blankson adds that the “GRA is also working to streamline state expenditure “in such a way as to bring it into line with the rates of revenue mobilisation. With that, once you bring the two together then the issue of the fiscal deficit is eliminated.”
“We aim to administer taxes in the fairest manner to give investors a levelled playing field so that there will be no differences in the tax incentive structures that confront them for businesses operating in the same area”

George Blankson, Commissioner
General of Ghana Revenue Authority
The GRA’s efforts are already paying off. Tax revenue as a percentage of GDP in 2009 hovered around 12 per cent. Two years later it brushed 15 per cent. Mr Blankson says that today it stands around 17 per cent. While the single tax and auditing entity leaves little to no room for taxpayers to “fiddle with the books”, it also makes compliance much easier and more convenient than before. 
As the overseer, the GRA also takes upon itself the responsibility of educating taxpayers. “We provide them with the right information so that they know what is required of them to comply with the taxes. We also work to create the right hassle-free environment,” says the Commissioner General. “When you make the environment convenient to them, you will have voluntary compliance.”
A smoothly functioning revenue collection system is also an attractive asset for potential investors, who see greater legal security in Ghana. 
“We know that for businessmen one of the key considerations is not so much the essentials but a certain predictability in the way that tax laws are administered,” explains Mr Blankson.
“If they’re administered in a formal way and also administered in a manner that is even and fair for all tax payers, then you find all the businessmen and all the investors facing the same incentive structure. This is the kind of business environment that the Ghana 
Revenue Authority is committed to creating – an open field, fair and levelled for all investors.” 
Aside from its one-stop tax and audit shop and all the other modernisation efforts the GRA has made, the authority has also undertaken the task to present new fiscal laws: a new VAT act, a new income tax act and a new customs act. The Commissioner General says these are designed to “ensure that the laws by which we mobilise revenue in all its facets are modern, more efficient and more effective.”
Moreover, the GRA is collaborating with the World Bank to develop new software for domestic tax administration, while the revenue authority’s upcoming GeGov online platform is being built to provide citizen-friendly public services.