Government to roll out paperless tax exemption system

Government is to roll out a paperless tax exemption system from January next year to block the revenue leakages that recur with the current manual system.
This means that companies applying for tax exemptions will have to do so online.
Speaking at a training programme organised by the Ghana Community Network Services Limited (GCNet) on the Revised Electronic Exemption Process for Ministries, Department and Agencies, a Deputy Minister of Finance, Mr Kwaku Kwarteng, said the system would ensure that government keeps track of the exemption granted.
Mr Kwarteng said the new system would provide a faster means to ensure revenue leakages were reduced.
“We have done the paperless clearing of goods at the ports. We are still doing some manual work in respect of the granting of exemptions from the payment of duties and other taxes.
“The time has come to do the paperless approval regime for exemptions from taxes and import duties.
Mr Eben Engmann, TradeNet Manager GCNet, said the system would rely on the e- MDA portal through which investors or companies seeking tax exemption will apply with all supporting documents.
The application is scrutinised by the concerned ministry, department or agency (MDA) and then granted approval online and if rejected the exemption is sent back to applicant for resubmission of changes.
Mr Engmann said exemptions approved will be sent to the Ghana Revenue Authority (GRA) which will undertake and assessment and if approved, a bill of entry (BoE) is created and then processed, with the trail kept from the beginning to the end.
However, when it is rejected by the GRA, it goes back to the MDA for processing and re-submission.
On the other hand, exemptions granted by Parliament will be billed into the system, and when the threshold allowed is exhausted, the system will automatically block any further exemption on the item, thereby saving the country taxes and duties it would have lost through the manual system.
Mr Engmann said the current system follows the same chain, it is manual and tends to be disorganised and lends itself to abuse, since it revolves around discretions.
Statistics from the GRA indicate a rise in imports associated with five per cent tax exemption from five per cent in 2014 to 14.20 per cent in the first half of 2015.
In the case of 20 per cent tax exemption, the figure had gone up from 20.44 per cent in 2014 to 22.43 per cent in the first half of 2015. By the end of 2015, the country had granted tax exemptions amounting to GH¢ 4.5 billion, according to GCNet statistics.
Mr Emmanuel Darko, the Deputy General Manager of the GCNet, said beyond enhancing government revenue, the new exemption system would create a platform for “better record-keeping of the exemptions granted.
He said the new system would help curtail some of the irregularities in the old exemption process, which is open to abuse since all the approvals will be given on the e-MDA portal so that it could leave the trail.
Currently, more than 20 MDAs, including the Minerals Commission, the Environmental Protection Agency, the Food and Drugs Authority, and the Ghana Free Zones Board are connected to the e-MDA portal which handles requests and approvals for permits and exemptions.