The president of the Ghana Union of Traders Association (GUTA), has said that many businesses are dodging the payment of taxes by engaging in online business activities. This he said is because there is a lack of data on online business activities, which prevent the tracking of the level of business activities on the internet.
Dr Joseph Obeng in an interview said that, Ghana can outperform its revenue generation targets this year if the tax net is spread out to include all transactions in the e-commerce sector.
“E-commerce is coming strongly to overtake most of the physical trading that we do.
“Government has not looked on that side especially when many businesses are migrating there due to the Coronavirus Pandemic and a huge volume of goods being traded there.
“A whole lot of people are dodging tax payments through this system. Government must sit with stakeholders to find ways to register all patrons of e-commerce even if it means setting up a server to track revenues.”
Dr Joseph Obeng
As a result of COVID—19 businesses have refocus their attention towards online platforms for their operations.
The Pandemic, albeit disrupting business activities, has created a huge demand for e-commerce which today accounts for 80 per cent of business activity in the SME sector.
Unfortunately, there is not any data tracking system by the GRA to tax business activities online.
Responding to these concerns Commissioner General of the Ghana Revenue Authority (GRA), Rev. Amissadai Amoah explained all technical preparations are in place to rope in the e-commerce sector.
“Today, data is one thing we are all-consuming, therefore, we expect that those in that sector should see their revenues going up. At the moment, we have still not started taxing e-commerce.
“It is one of the things that are already in our strategic plan that we are working on for this year and therefore we will come out with a plan at the right time.”
Rev. Amissadai Amoah
The total value of e-commerce in Africa reached US$16.5 billion in 2017 and the amount is expected to reach US$29 billion by 2022.
Although data is not immediately available for Ghana specifically, the use of digital channels for commerce has increased exponentially since March because of the COVID 19 outbreak and there are no indications when the situation will subside.
Indeed, the conventional wisdom now is that even when the pandemic does subside, digital commerce will retain a larger share of total commerce values and volumes than hitherto.
Disruptions in the local economy by Covid-19 has left the Ghana Revenue Authority (GRA) engaging the Ministry of Finance to set a new, lower revenue target for the year 2020.
As the internet becomes a hub for brisk online business, the GRA is pressed with the challenge of tracking down to ensure all forms of ecommerce are duly taxed.
According to the Oxford Business Group (OBG),
“Both internet and smartphone penetration have increased considerably in recent years, broadening the market for e-commerce services.”
Internet World Stats, a research engine in 2017 pointed out that, Ghana’s internet users were at about 10.1m, which is slightly above 30% of the population.
With the growing presence of the populace on web spaces, it is doubtless that the number of entrepreneurs who will jump onto “internet-based businesses and launching additional e-commerce offerings” will “rise,” according to the OBG.
From the analysis of OBG, Ghana’s online retail market is very promising.
“The growth of e-commerce is one of the trends to watch over the longer term, while more mall space is set to come onto the market in the coming years, particularly in Accra, sharpening competition for incumbents. The relatively low penetration rate of modern retail, combined with strong market fundamentals, means the outlook for increased consumption via new channels is positive. Likewise, despite a strong presence in malls, the range of international brands active in Ghana is still fairly small, but there is considerable scope for more to enter.
“Although downside pressure from domestic and global macroeconomics and taxation may weigh on retail growth for periods in the coming years, overall retailers that are able to adapt to the market will be well-placed to reap the benefits in the longer term.”
Oxford Business Group
