Electronic invoicing regime: Update on implementation
In the 2024 budget and economic policy statement read on 15 November 2023, Ghana’s minister for finance indicated that phase two of the electronic invoicing system (e-VAT), covering 600 large taxpayers and more than 2,000 small and medium taxpayers, will go ahead. The government has noted an underperformance in VAT revenue in recent years and the roll out of e-VAT is one of a number of measures being put in place to address this gap.In October 2022, the Ghana Revenue Authority (GRA) began implementation of e-VAT in a phased approach. Phase one comprised 600 specially selected large taxpayers who were required to use e-VAT when issuing tax invoices to customers. Ghana’s e-VAT operates as a certified invoicing system (CIS) that receives sales data from the taxpayer, which it validates and returns to be issued to the customer. The output from the CIS is dependent on the type of e-VAT solution implemented by the taxpayer.Ghana’s e-VAT is used to report both customer and supplier transactions
E-VAT solutions provided by the GRA
E-VAT is designed to automate the reporting and validation of a taxpayer’s business sales activity to the GRA in real time. The GRA has provided the following three solutions to enable taxpayers to comply with e-VAT requirements:
- Application programming interface (API): This solution is mainly for taxpayers who currently issue computer-generated invoices under a dispensation granted by the GRA. It involves the integration of the taxpayer’s billing system with the CIS. The GRA has indicated a framework is being designed to provide guidance on the use of third party integration providers.
- Free GRA certified e-invoicing solution: This is a web-based invoicing application provided for taxpayers who may not have a computerized billing system or wish to implement this solution rather than integrating an API into their billing system.
- Authorized third party software: The GRA is designing a framework to grant accreditation to third party software solutions that have the built-in functionality to exchange data with the GRA’s e-VAT as an intermediary.
Sanctions for noncompliance
A taxpayer that fails to comply with the e-VAT implementation requirements is liable to financial penalties of the higher of GHS 50,000 or three times the amount of tax involved. This penalty must be paid in addition to any penalty for failure to issue a tax invoice under the Value Added Tax Act, 2013 (Act 870).E-VAT will gradually replace manual or standalone taxpayer invoicing, as well as the current VAT invoice dispensation regime where some taxpayers have been granted special approval to issue computer-generated invoices. Given the government’s plan to have all relevant taxpayers enrolled for e-VAT by the end of 2024, businesses are encouraged to review their internal processes and assess their compatibility with the available e-VAT solutions offered by the GRA.There is also a strong indication (based on the recent budget announcement) of the government’s intention to use the commissioner-general’s certified invoice as the basis for all deductible expenses for income tax purposes. However, legislation to give effect to this objective has yet to be introduced.
