Merger of revenue agencies to improve tax compliance

The amalgamation of the three revenue agencies aimed at reducing tax evasion is an international best practice that would enhance revenue mobilization and improve tax compliance, Mr. George Blankson, Commissioner-General of the Ghana Revenue Authority (GRA) has disclosed.

The three revenue agencies undergoing the integration process are the Internal Revenue Service (IRS), Value Added Tax (VAT) and Customs Excise and Preventive Service (CEPS).

The process would operate mainly on an improved automation technology platform under the e-Government project to reduce costs and enforce the tax law efficiently.

Government and its development partners including the World Bank and German Agency for Technical Corporation (GTZ) have already pledged $104 million for the establishment and operation of the GRA.

At media interaction in Accra organized in collaboration with the Ghana Journalists Association and aimed at providing an informal platform for the management of the Authority and the stakeholders, Blankson said: “In modern tax administration, voluntary compliance is the bedrock on which efficient and enhanced revenue mobilization is founded.”

This requires a partnership with taxpayers in which constant information flow between taxpayers and the tax administration is essential.

He revealed that the focus of the reforms is to establish an Authority that places a high premium on service delivery. It is for this reason, that taxpayers segmentation is being undertaken, envisaging that at the peak of the reforms revenue collection would be maximized for national development.

“Improvement of information linkage and sharing information among the various divisions of the Authority would be one of the major benefit to be derived from the integration.

“Programmes and sub projects have been designed and are being implemented with activities aimed at developing a blueprint that would provide the strategic direction of the Authority.

Government believes the integration will make them more efficient and cut out tasks which are presently duplicated,” Blankson said.

The CEPS, IRS and the VAT collected a total tax revenue of GH¢4,567.00 million last year. Out of this amount, the IRS and VAT collected domestic tax of GH¢2,544 million.
The total national revenue for 2010 is expected to grow by 20 percent with domestic tax revenue also growing at 26.5 percent.

They observed that the target comes with its obvious challenges, especially, when the shape of the Integrated Revenue Agencies had not yet crystallized.

The Ghana Revenue Authority Act, 2009 (Act 791) received Presidential assent on December 31 2009 and has been passed to establish the Ghana Revenue Authority (GRA).

It passage will integrate the management of domestic tax and customs divisions and modernize domestic tax and customs operations through the review of processes and procedures.