MEDIA BRIEFING BY COMMISSIONER-GENERAL
Good morning Ladies and Gentlemen of the media.
We are here this morning for the first media briefing of 2012 to bring you up to speed on the performance of the Ghana Revenue Authority (GRA) in 2011 and the expectations for 2012. Since this is our first encounter in the New Year, may I, on behalf of the management and staff of the GRA take this opportunity to wish all of you prosperity and voluntary tax compliance in the year 2012. Today’s briefing will primarily focus on the following issues:
(i) Revenue performance for 2011
(ii) Revenue expectation for 2012
(iii) Current status of the GRA reform and modernization process
(iv) The way forward for the GRA in 2012
1. 2011 Revenue Performance
The Ghana Revenue Authority (GRA) target for tax revenue in 2011 was GHC7,544.66 million. At the end of December 2011, the GRA had collected provisionally GHC8,706.39 million, exceeding the target by GHC1,161.73million, giving a positive variance of 15.4%. The breakdown of the collection is as follows:
The breakdown of collection is as follows:
|Domestic Taxes (Direct)||
|(Excess 603.60million or 19.3%)||
|Domestic Taxes (Indirect)|
|(Excess 21.85million or1.6%)|
|(Excess 536.30million or17.5%)|
Overall, the 2011 collection performance is 46.6% over the actual collection performance for 2010.
The tax revenue/GDP ratio which collapsed to 12.7% in the wake of the re-basing in 2010, grew to 15.9% in 2011.
This is a remarkable achievement. At the High Level Aid Effectiveness Conference held in Busan, South Korea two months ago, attended by the UN Secretary General, four (4) Heads of State and the U.S. Secretary of State, Ghana’s achievement of 3 percentage points growth in tax/GDP ratio in one year came up for mention as a performance which has no precedent in recent revenue history.
Key among the factors responsible for the sterling performance of tax revenue in 2011 are:
(i) Synergies arising from the strides made in the reform for integration and modernization e.g. joint tax audits; information sharing about taxpayers on liability to different taxes which is deterrent against taxpayers reporting different figures for different tax types etc.
(ii) Clearance on permit, a facility which allows consignments to be removed from the port quickly and the documentation perfected later, and which became widely abused, was streamlined, resulting in about 80% drop in the use of the facility.
(iii) The introduction of the Ghana Integrated Cargo Clearance System which helps track the location of goods at the ports.
(iv) Deployment and widening of the coverage of the Valuation Assurance Programme.
(v) The establishment of the Rapid Deployment Force (RDF) by the Customs Division. The RDF acts on intelligence reports and clamps down on smugglers.
(vi) Streamlining of tax exemptions.
(vii) Effective implementation of initiatives announced in the 2011 budget including the airport tax.
(viii) Increased investment activities including the establishment of new companies in the wake of the commencement of oil production in Ghana and the good performance of gold price on the world market also gave a boost to tax revenue.
(ix) Tax education and engagement with stakeholders across the country resulting in improved voluntary compliance.
The exceptional revenue performance of GRA in 2011 would not have been possible without the goodwill and support of taxpayers.
I seize this opportunity to commend the spirit of voluntary compliance demonstrated by the majority of taxpayers in 2011 and urge them to keep it up. Plans are far advanced to hold a special function next month at which deserving taxpayers will be honoured.
2. Revenue Expectation for 2012
For the 2012 fiscal year, the GRA has been tasked to mobilize GHC 11,166.57million for the treasury. The breakdown is as follows:
|Domestic Taxes (Indirect)|
The 2012 target (GHC 11,166.57) is 28.3% over and above the 2011 actual collection.
3. Integration and Modernization
Ladies and gentlemen, the broad-front revenue reform initiated with the passage of the GRA Act in the closing month of 2009, remains on equal footing with revenue target realization as the centre-piece of GRA’s activities.
The main thrust of the GRA’s modernization programme involves redesigning and improving upon the Authority’s business processes and procedures, intensifying and expanding the use of IT to improve service delivery and constructively engaging all stakeholders in a manner that will yield sustained results and confidence in the country’s tax system. The reform, integration and modernization of the GRA have chalked important milestones.
(a) Appointment of Deputy and Assistant Commissioners
To assist Top Management pursue the modernization and reform process, Deputy and Assistant Commissioners were appointed and assigned various responsibilities in the three Divisions of the GRA in 2011. The assignment of the Assistant Commissioners is critical to the establishment of the requisite new structures in GRA. The units headed by the Assistant Commissioners are the building blocks of the new GRA’s operational and administrative structures.
(b) Domestic Tax Integration
The physical integration of the offices of the Domestic Tax Revenue Division, (DTRD) that is, the operational wings of the erstwhile Internal Revenue Service (IRS) and the Value Added Tax Service (VATS) designed to enhance taxpayer convenience and enable the staff discharge their duties effectively is crucial to the reform process. This is going to begin in the Accra/Tema metropolis where nine pilot sites have been identified for take-off before the end of the first quarter. In furtherance of this, the blue print for re-organization of the existing offices of the DTRD into Medium Taxpayer Offices (MTOs) and Small Taxpayer Offices (STOs) has been completed and managers (Assistant Commissioners) appointed to head them.
(c) Modernization Plan
Sixteen (16) project teams were set up in 2011 under the Project Management Approach to see to the various aspects of the integration process. The teams have completed and submitted their work which details the specific activities, associated costs and timelines. Based on this work, a Draft Modernization Plan spanning 2011 to 2014 has been produced. The approved plan constitutes a blueprint for the modernization of GRA. A draft Strategic Plan has also been completed.
4. Registration and Re-registration
The registration of new taxpayers and re-registration of existing taxpayers by the GRA and the Registrar-General’s Department (RGD) using the Total Revenue Integrated Processing System (TRIPS) under the Gegov Project commenced last month (i.e. December 2011.) Under this project the two organizations are linked electronically to enable the GRA access the database of the RGD for tax purposes. All registered businesses ultimately and individuals are being given new Taxpayer Identification Numbers (TIN). The benefits that registered businesses ultimately stand to gain from the re-registration exercise include improved quality of customer records, improved service delivery, access to a variety of online government services including filing of returns, payments, appointment scheduling, a Gegov Portal and reduced tax compliance costs.
5. Re-location of the Large Taxpayer Office
Effective 5th September, 2011, the Large Taxpayer Unit (LTU) which had served as a pilot for functional revenue administration since 2004 re-located from the Revenue Tower at Osu to the First floor of the VAT House near the Busy Internet and commenced business as the Large Taxpayer Office (LTO) in line with the criteria for segmentation of taxpayers.
6. Relocation of GRA Head Office
With funding from GIZ/Good Financial Governance Programme, the 4th and 5th floors of the Head Office of the erstwhile Internal Revenue Service (IRS) have been renovated and refurbished. Consequently, the GRA Head Office, currently located at the 6th floor of the Heritage Tower at Ridge will re-locate to the Head Office of the erstwhile IRS in the first quarter of 2012. The building will house the Commissioner-General, the three (3) Commissioners and selected supporting staff. This will make for easy co-ordination of programmes and activities. Renovation works are scheduled to commence soon on the remaining floors of the former IRS building, and the former VATS Head Office to accommodate the rest of GRA Head Office.
7. Legal Framework
A new Draft VAT Legislation has been produced and presented to Parliament. The Draft Bill for the Internal Revenue law is also being reviewed by a Consultant. The work of re-crafting the Customs Law will commence at the end of January, 2012. Work on the draft Tax Administration Act (TAA) which brings together the Administrative provisions of the three primary Acts governing tax administration in the country has been completed
8. The Way Forward for 2012
In spite of the challenges, the reform process is on course. GRA management is committed to ensuring that the objectives set for the modernization process are realised. Management will continue to maintain a careful balance between revenue mobilization and the reform agenda in the year 2012, to ensure that the revenue target is achieved and even exceeded to provide sufficient funds for national development.
The reform process aimed at putting revenue collection on a higher growth path in the long term will be supported by short and medium term measures which will include the following:
- Intensification of audit particularly of Large Taxpayers
- Quick but scrupulous examination of submitted tax returns
- Recovery of Tax Arrears (Enforcement and Debt Management)
- Effective tracking and interception of smuggled goods. The operations of the Rapid Deployment Force will be further enhanced to make it even more effective.
- Regular inspection to ensure payment of taxes by operators in the informal sector Effective monitoring of the Customs Suspense regimes i.e. the Temporary Importation of Vehicles, the Transit and the Warehousing Regimes
It is important to add that GRA management recognizes the important role that tax education and engagement with stakeholders play in ensuring compliance. For this reason, public education will be sustained and deepened. Enforcement and compliance measures will be implemented firmly and fairly. GRA management expects the co-operation of the media and the public in the rather difficult task of revenue mobilization so that together we shall all reap the benefits of enhanced revenue for national development.
Thank you for coming and God bless us all.