The Ghana Revenue Authority (GRA) has retrieved about GH¢400 million from inappropriate transfers that multinational companies effected last year, a practice known as transfer pricing.
On December 31, 2018 alone, one of the companies paid $10 million (about GH¢50 million) which it admitted was transferred out of the country inappropriately. The GRA also retrieved about GH¢100 million from Vodafone Ghana Limited.
Commissioner General of GRA Mr Emmanuel Kofi Nti, who made the disclosure at a media interaction, declined to mention the names of the companies.
He explained that the Transfer Pricing Unit of the GRA, which was set up not long ago, found that the said company had transferred about $14 million out of the country illegally.
Transfer pricing occurs most often when multinational companies sell goods to divisions in other international jurisdictions.
The system is laden with abuse because companies can deliberately pay higher prices for items or intermediary products they purchase from overseas-related parties.
When this happens, it increases the expenses of the local entities, resulting in lower statutory payments such as taxes.
Ghana introduced transfer pricing regulations in 2012 (L.I. 2188), making the GRA aggressive in undertaking both desk and field transfer pricing audits.
The GRA also set up the Transfer Pricing Unit that stepped up on-site audits. As of January 2015, over 250 reviews (mainly desk audits) had been undertaken by the GRA.
Mr Nti explained that GRA’s tax revenue target of GH₵45 billion for 2019 was high in comparison with its target of GH₵39 billion in 2018.
He added that there is an ongoing discussion to review the revenue target upwards in line with government’s objective of a Ghana beyond aid.
“The GRA will marshal all its efforts to considerably improve on its collections for the year. Even for 2018 where we faced considerable challenges, we were able to achieve a 16.4[%] growth over the 2017 collection. It is my expectation that we will achieve the projected upward revised target,” he said.
The authority, he said, was devising various strategies that will help it achieve the 2019 target, including stepping up of activities to identify and plug revenue leakages, full implementation of the Excise Tax Stamp policy and broadening the tax net as the big industry players are now on board.
Other measures outlined by the authority include continuous compliance and enforcement activities, Desk review of all annual returns submitted for 2018 and previous years, and intensifying compliance activities on rent tax, among others.
“We will ensure full implementation of the Tax Identification Number (TIN) with the help of GRA staff and the Nation Builders Corps (NABCO) interns, as well as setting up the Informant Awards Scheme to award informants on revenue generated through their support,” he further outlined.
Mr Nti also noted that the authority was poised to work at increasing the compliance level of professionals, adding that professionals such as lawyers, accountants, architects, surveyors and doctors will be made to pay their fair share of taxes in accordance with the law, including the issuance of VAT receipts for their services.
thefinderonline.com