Ghana is losing significant revenue due to low compliance with the Value Added Tax (VAT), as only 40 out of every 100 registered taxpayer companies currently honour the tax.

The Commissioner-General of the Ghana Revenue Authority (GRA), Anthony Kwasi Sarpong, who disclosed this in Accra on Tuesday, January 3, said the 60 per cent shortfall significantly undermined domestic revenue mobilisation and limited the state’s ability to finance essential public services and national development programmes, such as schools, hospitals and roads.

To address the challenge, the Domestic Tax Revenue Department of GRA has set up a team, the National VAT Compliance and Enforcement Team, to improve compliance and boost revenue collection.

The team is a key institutional mechanism for the effective implementation of the new Value Added Tax Act, 2025 (Act 1151), which took effect on January 1, this year.

Mr Sarpong, who inaugurated the team yesterday, stated that VAT held the potential to contribute significantly to domestic revenue towards national development.

He cited an experiment in December last year where the GRA’s enforcement team in Accra found out that three out of every five shops were neither registered for VAT nor were registered but were not charging, or they were charging but were not remitting to the state.

“That means that 60% of every shop that you see on the street are not complying with their VAT obligations. And that is why, as GRA, taking our mandate for revenue mobilisation seriously and learning from that experimentation, we have quickly put in this national enforcement team,” the Commissioner-General stated.

"We as GRA, as tax administration, need to do well to ensure that we are moving way beyond the passing grade, which is 90 per cent," he said.

The 26-member team, chaired by the acting Commissioner of the Domestic Tax Revenue Division (DTRD) of GRA, Dr Martin Kolbil Yamborigya, is expected to promote voluntary VAT compliance nationwide.

Its mandate is to detect and deter non-compliance while ensuring that the provisions of the new VAT Act are applied consistently and professionally across all sectors of the economy.

The team comprises experienced officers with specialised expertise in audit, investigation, intelligence, legal enforcement, and taxpayer services.

Mr Sarpong said the newly formed team would prioritise taxpayer education while intensifying monitoring across high-risk sectors of the economy.

He explained that the team would support businesses to voluntarily meet their VAT obligations through guidance delivered with professionalism and fairness.

“Our first approach is to assist taxpayers to comply, not to punish them," he said.

However, he cautioned that enforcement action would be taken against businesses that persistently failed to register, charge or remit VAT to the state.

“Where the law is deliberately ignored, we will not hesitate to enforce compliance," Mr Sarpong said.

He stressed that data and analytics were being deployed to identify non-compliant taxpayers across the country.

The Commissioner-General stated that improved VAT compliance would significantly enhance domestic revenue mobilisation and reduce pressure on government borrowing.

He stressed that higher VAT inflows would allow the state to finance critical infrastructure and social services.

“VAT revenue is essential for building roads, hospitals, and sustaining public services," he said.

Mr Sarpong, therefore, urged businesses and consumers to support the reforms by complying with VAT laws and consistently demanding VAT invoices, as this was a shared responsibility in advancing national development.

“Anytime a VAT invoice is not demanded, the tax meant for the state ends up in private pockets. VAT compliance cannot be achieved by the tax authority alone," he said.

“For businesses and individuals that are in the category of the 60 per cent, one, if you are eligible for registration and you haven't registered, there's a call on you to immediately register. And for GRA, within 24 hours, when you make the application for registration, we can complete your VAT registration,” he assured the business community.

Dr Yamborigya stated that the introduction of the VAT Act, 2025, reflected the government’s determination to modernise the tax system, broaden the tax base and promote fairness, transparency, and efficiency in revenue collection.

However, he said legislation alone was never sufficient, explaining that the success of the Act depended on robust implementation, consistent enforcement, and sustained taxpayer confidence in the credibility of the system.

Dr Yamborigya said, “Enforcement is not about punishment for its own sake; it is about fairness — when everyone pays what is due under the law, the burden is shared equitably.”

The acting Commissioner of the Domestic Tax Revenue Division (DTRD) stressed that such an approach protected compliant businesses from unfair competition and better positioned the government to deliver essential services to citizens. 

He added that the new VAT regime was designed to be predictable, transparent and supportive of a stable business environment.

A lead member of the team, Wisdom Xetor, said the task force would begin nationwide operations immediately to tackle the challenges, including non-registration, failure to file returns and the non-remittance of VAT collected on behalf of the state.

He stated that VAT was a consumption tax intended to finance essential public services, and that non-compliance deprived the state of critical revenue.

The initiative would be driven, therefore, by a risk-based and intelligence-led strategy, with particular attention on high-risk sectors and habitual offenders, alongside sustained taxpayer education and engagement.