GRA cracks the whip ...targets GH¢2.7m from tax defaulters

The Ghana Revenue Authority (GRA) has begun a nationwide “distress action” to recover approximately GH¢2.7million from 24 tax-defaulting firms in the Greater Accra Region, Commissioner-General, George Blankson, has disclosed.

The GRA’s Debt Management and Compliance Enforcement Unit is currently collaborating with offices throughout the country to seal off the premises of these companies to recover all tax arrears owed to the state.

The exercise will retrieve all outstanding tax arrears owed to the state between 2005 and 2012. It also marks the beginning of a comprehensive programme of enforcement actions to recover all outstanding tax arrears nationwide, especially as Government is battling a shortfall in tax revenues.

Mr. Blankson told journalists at a news conference in Accra before the start of the distress action that “our preferred, and indeed first, option in the recovery of debts is communication by telephone, through visits or in writing to get delinquent taxpayers to comply; because as much as possible we want taxpayers to continue in business, and even grow, so that they pay their current tax arrears and pay more taxes in future.”

He explained that the defaulting taxpayers have for several months and years failed to pay or make satisfactory arrangements to defray their indebtedness to the Authority. 

“We have no other choice than to fall on the provisions of the tax law to recover these outstanding arrears through hard enforcement actions. It is only when the soft approach fails that we can fall on hard enforcement actions as a final resort. It becomes our painful duty to levy a distress warrant or seal off premises in extreme situations,” he said.

At the start of the distress action, the GRA sealed off two premises: PH Hotels, located at East Legon, for defaulting on taxes amounting to GH¢314.145.55; while the second firm, AFWest Security also located at East Lagon, was closed down for owing GH¢187,678 in taxes. 

The management of Mensvic Grand Hotel, whose premises were visited by the enforcement team, promptly paid the amount of GH¢48,159 they owed.

Government has projected in its 2013 budget statement that revenue from taxes will amount to GH¢17.1billion, representing 19.3 percent of Gross Domestic Product (GDP). Taxes on income and property were estimated at GH¢7.8billion, accounting for 45 percent of total tax revenue.

The budget also forecast a fiscal deficit of GH¢8billion (9 percent of GDP), but early signs of revenue underperformance -- which threatens the deficit goal -- have led to stronger efforts to boost tax collections and close loopholes in the system.  President John Mahama has also made significant changes to the leadership of the divisions and sub-divisions of the GRA to improve the Authority’s performance.