Ghana loses millions in VAT revenue

The country is said to be losing millions of cedis in tax revenue annually as a result of the refusal of customers to demand Value Added Tax (VAT) receipts at points of service.

Experts and analysts at a workshop in Takora­di said some service providers were exploiting that show of public apathy to deny them VAT receipts, thereby making it difficult for tax inspec­tors to measure the volume of transaction.

They said hotels, restaurants and shops were the worst offenders and suggested an electronic system that would eliminate cheating from the VAT collection machinery.

Briefing the Daily Graphic, a Senior Lecturer at the University of Ghana Business School, Mr Kwame Gyasi, said if nothing was done to change the culture of apathy for people to insist on their VAT receipts it would have serious effects on the country’s revenue mobilization efforts.

He said the situation called for a mass educa­tion for the public to realise the effects of their action on revenue mobilization, saying, “If receipts are not collected, the buyer and the state are both cheated.”

Daily Graphic investigations in the Sekondi-Takoradi area revealed that some restaurants, shops and hotels were not making use of VAT booklets at all.

At some of the places the Daily Graphic visit­ed, waiters at the end of service, walked to the tables and just mentioned the bill to the customers, without issuing any receipts.

When the Daily Graphic contacted the West­ern Regional Office of the VAT Service, the Regional Manager, Mr Francis A. Sapathy, cor­roborated the story and said the act was robbing the nation of revenue,

According to him, in most of the facilities the true volume of transaction did not reflect in what was collected for the state.

Mr Sapathy said if members of the general public began to demand receipts after every ser­vice at restaurants, hotels and other public places the situation would change.

“The tax that we collect is supposed to build our social structures. We the people who demand these facilities are the same people refusing to acknowledge that our apathy is not helping to raise the needed funds.

“There are triplicate carbonated pages involved in each transaction – the original page is issued to the customer and this makes it easy for us to check the volume of transaction against what is declared.

“But if the transaction took place and there is no record of it, then it means there is no evidence to prove that the transaction really took place,” he said.

Asked what the service was doing about the situation, Mr Sapathy said the best way forward was to let those service providers acquire cash machines or adopt retail schemes.

Source: Daily Graphic