GRA steps up effort to chase VAT defaulters with new enforcement group – Life Pulse Daily
Editor-in-chiefFebruary 4, 20263 Mins read34
GRA Intensifies VAT Enforcement: New Unit Targets Tax Defaulters
Introduction
The Ghana Revenue Authority (GRA) has launched a major initiative to close the gap in Value Added Tax (VAT) collection across the country. With approximately 60% of businesses reportedly non-compliant with the reformed VAT system introduced on January 1, 2026, the authority has established a dedicated Compliance and Enforcement Unit to ensure proper tax collection and boost national revenue.
Key Points
- GRA launches new Compliance and Enforcement Unit to tackle VAT non-compliance
- 60% of businesses visited by GRA officials were found not paying VAT correctly
- Unit aims to improve VAT payment rates and encourage voluntary tax compliance
- Initiative is part of broader strategy to close VAT collection gaps by year-end
- 26-member team tasked with professional enforcement of VAT regulations
Background
The reformed VAT system was implemented on January 1, 2026, with the expectation of providing consumer relief while generating additional revenue for the state. However, recent assessments by the GRA revealed significant non-compliance issues, with about 60 out of every 100 businesses visited failing to properly remit VAT collected from customers.
This widespread non-compliance has resulted in substantial revenue losses for the government, prompting the need for more aggressive enforcement measures. The VAT system, when properly implemented, has the potential to significantly boost the country’s revenue mobilization efforts.
Analysis
The establishment of this specialized enforcement unit represents a strategic shift in the GRA’s approach to tax collection. Rather than relying solely on voluntary compliance, the authority is now taking a more proactive stance to ensure businesses fulfill their tax obligations.
The 26-member team under the Domestic Tax Revenue Division will focus on several key areas:
– Identifying businesses that collect VAT but fail to remit it to the GRA
– Conducting regular audits and assessments of VAT compliance
– Providing education and support to help businesses understand their obligations
– Taking enforcement action against persistent non-compliant entities
This approach recognizes that while many businesses may be willing to comply, they may lack understanding of the new VAT system or face operational challenges in implementation. By combining enforcement with education, the GRA aims to create a more sustainable compliance culture.
Practical Advice for Businesses
If you’re a business owner in Ghana, here are steps you should take to ensure VAT compliance:
1. **Review your VAT registration status** – Ensure your business is properly registered for VAT if your turnover exceeds the threshold.
2. **Understand the new VAT rates and exemptions** – The reformed system may have different rates or exemptions compared to previous regulations.
3. **Implement proper accounting systems** – Use accounting software that can accurately track VAT collected and paid.
4. **Maintain detailed records** – Keep all VAT-related documents, including invoices and receipts, for at least five years.
5. **File VAT returns on time** – Submit your VAT returns by the statutory deadlines to avoid penalties.
6. **Seek professional advice** – Consult with tax professionals if you’re unsure about any aspect of VAT compliance.
7. **Engage with GRA proactively** – If you’re facing challenges with VAT compliance, contact the GRA before enforcement action is taken.
FAQ
What is the purpose of the new GRA Compliance and Enforcement Unit?
The unit’s primary purpose is to improve VAT payment compliance and encourage voluntary tax compliance among businesses. It aims to close the significant gap in VAT collections by identifying non-compliant businesses and taking appropriate enforcement action.
How will the GRA identify VAT defaulters?
The GRA will conduct regular assessments and audits of businesses, particularly focusing on those suspected of collecting VAT from customers but failing to remit it to the authority. The enforcement team will also respond to reports of non-compliance and conduct targeted investigations.
What are the consequences for businesses that don’t comply with VAT regulations?
Non-compliant businesses may face penalties, fines, and potential legal action. The GRA may also revoke VAT registration for persistent defaulters and pursue criminal prosecution in serious cases of tax evasion.
How can businesses voluntarily comply with VAT regulations?
Businesses can ensure compliance by registering for VAT if required, maintaining proper accounting records, filing VAT returns on time, and paying the correct amount of VAT. The GRA also provides guidance and support to help businesses understand their obligations.
Will the new enforcement measures affect small businesses?
While the enforcement measures apply to all businesses, the GRA has indicated that it will take a balanced approach. Small businesses that make genuine efforts to comply will likely receive more support and guidance, while those deliberately evading taxes will face stricter enforcement.
Conclusion
The Ghana Revenue Authority’s establishment of a dedicated VAT enforcement unit marks a significant step in addressing the widespread non-compliance with the reformed VAT system. By combining enforcement with education and support, the GRA aims to create a more sustainable tax compliance culture that benefits both businesses and the national economy.
For businesses, this development serves as a clear signal that VAT compliance is no longer optional. The time to ensure proper VAT procedures are in place is now, before enforcement action becomes necessary. With approximately 60% of businesses currently non-compliant, there is substantial room for improvement in VAT collection that could significantly boost Ghana’s revenue mobilization efforts.
The success of this initiative will depend on the GRA’s ability to balance enforcement with support, ensuring that businesses understand their obligations while facing appropriate consequences for deliberate non-compliance. As the year progresses, all eyes will be on the effectiveness of this new enforcement unit in closing the VAT collection gap and contributing to Ghana’s economic development.
Leave a comment