Introduction
Ghana is moving towards an era of robust tax compliance, and the Ghana Revenue Authority (GRA) is “showing no face.” Businesses of every kind are now being audited. Recently, in the news, has been the audit of the Telecommunications Giant, MTN, with GRA slapping taxes (both principal and interest) of some $773m for alleged tax infractions. Even professional services firms that aid in tax compliance are now being audited.
It is therefore important that businesses (especially those that have not been audited since inception) begin to advert their minds to the possibility of being audited. This article is in three parts: The first part looks at the tax audit landscape in Ghana, GRA’s mandate to audit taxpayers, and some common triggers of tax audit and investigation. The second part focuses on the tax audit process and how to prepare for tax audits. The last section looks at the mechanisms or means by which tax controversies and disputes can be resolved.
GRA’s Audit Mandate
The Ghana Revenue Authority is the body responsible for tax administration in Ghana. Its role includes ensuring compliance with tax laws and mobilizing revenue for the government through taxes. Under section 36 of the Revenue Administration Act, 2016 (Act 915), GRA has the mandate and power to audit the tax affairs of a person.
Tax Audit Triggers
So, what can make the GRA like you so much that they may want to audit you? Something unique about your business? Maybe! Tax Audit is usually driven by internal and external factors.
External factors
- Government’s revenue appetite and expenditure financing
- Global trends such as tax revenue to GDP in other similar jurisdictions
- Growth in a particular sector or industry like gaming and other digital services
- Legislation: tax amnesties, exchange of information, tax reporting, and whistleblowing
Internal factors (The RFDP Risk Matrix)
Mainly driven by compliance risks:
- Don’t register for taxes; they will come after you!
- Don’t file your tax returns on time; they will come after you!
- Fail to make the right declarations on tax returns; they will come after you!
- Don’t pay your taxes or delay paying your taxes; they will come after you.
Other factors that trigger tax audits are:
- Tax refund application
- Winding up/suspending business operation
- No audits in a very long time
- Suspected tax fraud
Conclusion
In conclusion, we have looked at the tax audit landscape in Ghana and how “the storms and tides” are fast-rising in that space. We have also looked at the fact that GRA’s tax mandate and jurisdiction is entrenched in law. Lastly, before GRA considers whether or not to audit your business, they consider a wide range of factors that can be driven by the external business and regulatory climate as well as non-compliance with factors that are within the control of your business, like registering for taxes, filing your tax returns, making the right tax declarations, and paying the right amount of taxes based on your tax declarations.
About the Author:
This Article was written by Peter Kelly Agbeehia. Peter is a Chartered Tax Practitioner in Ghana and Transfer Pricing Consultant for an International Transfer Pricing and Tax Structuring firm with Offices in the UK, Ireland, South Africa, and Mauritius. His areas of specialty include Corporate and Commercial Law, Client Representation and Advocacy, Tax Advisory, Tax Compliance Management, Tax Audit Support and Controversy Management; Strategic Tax Planning; Transactions Structuring; Transfer Pricing and International Taxation.