The Ghana Revenue Authority (GRA) has introduced the Certified Invoicing System otherwise known as the E-VAT to replace the manual way of collecting VATs.

The E-VAT system which allows the Authority to collect VATs electronically, is being rolled out in phases and is currently at its piloting stage.

“E-VAT Portal to issue Electronic VAT invoices to customers will be piloted by 50 taxpayers. After a successful trial, the system will be made available to all taxpayers.”
GRA

E-VAT ultimately is meant to make the payment of Valued Added Tax (VAT) electronic so as to eradicate or at least reduce the discrepancies that happens with the manual system that is currently being used.

Currently, there are some companies which already pay VAT using electronic mediums. However, that is not GRA’s E-VAT system.

How The E-VAT System Works

“A taxable person shall (a) issue a tax invoice through a certified invoicing system (b) ensure that the certified invoicing system of the tax, is integrated into the Commissioner General’s invoicing system. “
GRA Act

The statement above, is the law that established the E-VAT system.

Speaking in an interview with an Accra-based radio station, Mr. Patrick Frimpong Danso, Technical Member of E-VAT Implementation Team explained what the law means.

The crux of his explanation was that, registered VAT companies will have computerized systems for the payment of VATs. The systems at the companies will be linked to a more robust system available to the GRA.

This gives GRA the privilege to monitor all transactions that go on in VAT registered companies from their headquarters.

Mr. Danso intimated that, in the long term, that is after the E-VAT is fully rolled out across the Country, all taxable companies, “will have a workable system that calculates VAT and that system will be intertwined with the Commissioner General’s system.”

The Commissioner General’s system has some unique features which enables GRA agents working on behalf of the Commissioner General, monitor work done and VAT paid in all VAT registered Companies.

The basic feature of the E-VAT system is that, invoices generated using the system has the Commissioner General’s signature.

The other features that ensures that taxable companies pay as much VAT as they are supposed to are:

(i) the heartbeat feature (ii) the real time revenue monitoring feature (iii) the verification access feature

The heartbeat feature is a light indicator that appears on the Commissioner General’s system to demonstrate whether companies are using the computerized system or not.

If the indicator is ‘green’, then it means the company is using the system. However, when it turns ‘red’, then the device or system is off.

According to Mr. Danso, since GRA is aware of the work hours of its clients, GRA will be able to check tax invasions. If a company is expected to be working but the signal that shows on the Commissioner General’s system is red, then probably, the company has deliberately turned off the device in an attempt to invade VAT.

GRA agents, will therefore be tasked to visit such places to ascertain why their systems went off during their working hours.

The real time revenue monitoring feature on the other hand, allows GRA agents to open the invoices of companies from the comfort of the GRA headquarters. This way, GRA agents can see all items purchased in the company or shop and also check whether the items purchased tally with the VAT paid.

The verification access feature embosses a QR code on receipt given to customers after they make purchases in VAT registered companies or shops. GRA agents occasionally, will pass by shops to scan receipts given to customers to see whether they were generated using GRA’s system or not.

The Authority is well aware of the fact that, some shops can make pseudo receipts and hence the importance of the verification feature. Mr. Danso mentioned that, “GRA intends to institute a reward system for customers who make their receipts available for verification.”

Things to Take Note of

Companies which have an electronic system for paying their VATs will only have their systems integrated into GRA’s E-VAT system. That is, their system, will be made to include the features of the Commissioner General so that the GRA can monitor all their transactions.

GRA is however willing to provide free computerized systems that are synchronized with GRA’s system to VAT registered companies which do not have electronic payment systems yet.

Since the whole E-VAT system is at its piloting stage, all VAT registered companies which have not been transitioned unto GRA’s E-VAT system, must stick to paying VAT’s by using either an independent electronic system, i.e. a system that hasn’t been incorporated into GRA’s system or by using the manual invoicing way.

Mr. Danso said that, the Certified Invoicing System (E-VAT) is tried and tested. It is robust and has a lot of redundancies that prevents the system from crashing and being hacked.

Moreover, the whole system is built in a way that makes it possible to be used even when there is no internet connectivity.