Regulatory updates - Ghana

The Ghana Revenue Authority (GRA) is onboarding an additional 2000 VAT-registered taxpayers to the Electronic VAT Invoicing System as a part of the second phase. Onboarded taxpayers will have to issue electronic VAT invoices. The new E-VAT system will help the GRA monitor real-time VAT transactions.

Similarly to the previous onboarding, taxpayers in the scope of the second phase have been invited to seminars with the GRA to help with the onboarding steps.

The pilot phase has been completed, and Ghana’s Revenue Authority (GRA) published a list of businesses invited for onboarding. GRA will hold seminars for the four subgroups of the taxpayers invited. Companies are to nominate managers/supervisors to attend the programme per the schedule published by GRA.

As mentioned, 600 VAT-registered taxpayers should be onboarded on the system by this month. The roll-out is aimed to continue until all VAT-registered taxpayers have been onboarded to the VAT e-invoicing system, which applies to both VAT Flat Rate and Standard Rate Schemes.

The first phase of the Ghanaian e-invoicing system, which ended in 2022, applies to large and high-risk taxpayers. The second phase will include 600 large and over 2000 small and medium taxpayers and is intended to be finalized by December 2024.

Some highlights of the Budget Statement are listed below:

• e-VAT invoices will be required and serve as the basis for all deductible expenses related to income tax;
• The implementation of “upfront VAT” on imports of taxable goods by unregistered importers continues;
• All commercial properties will be subject to a flat rate of 5% VAT instead of the standard rate of 15%;
• To reduce distortions and abuses, some VAT exemptions will undergo review;
• Two more years will be added to the zero-rating of VAT on locally manufactured African prints and vehicles assembled domestically;
• Raw materials for the local production of sanitary pads will be exempt from import duties, and VAT on pads produced locally will be zero-rated;
• Electric vehicle assembly in Ghana will be exempt from import duties, including semi-knocked down units (SKDs), completely knocked down units (CKDs), and fully built units (FBUs);
• Commercial electric buses for public transportation will be exempt from import duties;
• Import of agricultural machinery, equipment, and inputs that are not available locally will also be exempt from import duties.

More information about the budget implementation is still to be disclosed.

As of 1 October 2022, the Government of Ghana has launched Electronic VAT (E-VAT) Portal for 50 selected taxpayers, with an additional 600 taxpayers expected to be connected by the end of the first quarter 2023.

Currently, the e-VAT system is only open to selected taxpayers. Taxpayers in the scope need to integrate their invoicing system to the e-VAT platform to authenticate receipts or invoices and report real-time transaction data to the government.

The system will be authenticated by an app, and the GRA has also deployed compliance officers to enforce the implementation. Taxpayers chosen for the exercise run the risk of having their operations shut down by the GRA if they do not connect with the e-VAT platform. The Ghanaian authorities expect all taxpayers to be enrolled in the system by 2024.