Question Tag: Revenue Collection

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  • 4 Marks

PT – Nov 2021 – L2 – Q2b – Withholding Tax Administration

Explain the objectives of the Withholding VAT Scheme introduced by the Ghana Revenue Authority.

One of the innovations by the Ghana Revenue Authority is the introduction of the Withholding VAT Scheme. The scheme is aimed at promoting tax compliance.

Required:
Explain FOUR (4) objectives of the scheme.

The objectives of the Withholding VAT Scheme are:

  1. Reduces Nil and Non-Filers: Reduces the number of nil and non-filers, as surveillance and monitoring ensure that deception in filing is minimized.
  2. Reduces Future Uncollectible Debts: The scheme collects VAT upfront from major consumers, thus reducing future uncollectible debts.
  3. Increases Voluntary Registration: Taxpayers, knowing they are being monitored, voluntarily comply with the obligations under the law.
  4. Improves Revenue Flows: The government can raise revenue through this medium, promoting compliance and ensuring efficient collection.
  5. Enhances Compliance: The scheme has generally improved compliance among taxpayers.
  6. Promotes Fair Application of Tax Laws: Ensures that the tax laws are fairly applied to all taxpayers.
  • 4 Marks

AT – Nov 2018 – L3 – Q4c – Tax administration

Explanation of the objectives and effects of tax amnesty on government revenue.

As part of tax administration, the government rolls out tax amnesty from time to time.

Required:
i) What does tax amnesty seek to serve? (2 marks)
ii) What are the effects of tax amnesty on revenue? (2 marks)

i) What does tax amnesty seek to serve?

  • Tax amnesty is a limited-time government offer that allows individuals or businesses that have failed to register, file returns, or pay taxes to regularize their tax obligations without facing penalties or criminal charges.
  • The primary goal of tax amnesty is to broaden the tax base, improve voluntary tax compliance, and encourage taxpayers to disclose hidden or undeclared income and assets, thereby increasing government revenue in the short term.

ii) Effects of tax amnesty on revenue:

  • Immediate revenue boost: Tax amnesty often results in a short-term increase in tax revenue as previously non-compliant taxpayers come forward to settle their outstanding liabilities without facing penalties.
  • Long-term compliance: Taxpayers who participate in the amnesty program may continue to comply with tax regulations in the future, contributing to sustained revenue collection over time. However, repeated tax amnesties may lead to a culture of tax avoidance, with some taxpayers delaying payments in anticipation of future amnesties.
  • 6 Marks

AT – Nov 2018 – L3 – Q1c – Tax administration in Ghana

Evaluating the roles of Ghana Revenue Authority in managing the Ghanaian economy.

Tax reforms have characterised global taxation. Countries have embarked on various reforms geared towards improving tax revenue to help provide the basis for infrastructural and guarantee sustainable development. Ghana has not been left out in these critical tax reforms.
Tax administration in Ghana therefore has seen a number of reforms since the 1960s, with the most recent being the integration of the Revenue Agencies into an Authority to act as a one-stop shop as per the Ghana Revenue Authority Act, 2009 (Act 791).
Required:
Evaluate FOUR (4) roles played by the Ghana Revenue Authority in the management of the Ghanaian economy. (6 marks)

The Ghana Revenue Authority (GRA) plays the following roles in managing the Ghanaian economy:

  • Assess and collect taxes, interest, and penalties: Ensures optimum efficiency in tax collection and payment into the Consolidated Fund.
  • Promote tax compliance and education: GRA promotes voluntary tax compliance through public education and awareness.
  • Combat tax fraud and evasion: It works with other law enforcement agencies, both locally and internationally, to combat tax fraud and evasion.
  • Advise District Assemblies: GRA provides support and guidance to District Assemblies in their efforts to assess and collect local revenue.
  • Make recommendations on revenue collection policy: GRA advises the Minister of Finance on policy reforms to enhance revenue collection.
  • Publish reports and statistics: GRA is responsible for preparing and releasing relevant reports and statistics related to revenue collection.
  • 4 Marks

PSAF – May 2019 – L2 – Q2d – Public sector fiscal planning and budgeting

Identify ways to improve Internally Generated Funds (IGF) of local governments.

d) You have recently been appointed as a District Chief Executive (DCE) of a particular district. It has come to your attention that the Internally Generated Funds (IGF) of the District Assembly are very low, and you intend to address the problem for the assembly.

Required:
Identify FOUR (4) ways in which the IGF of the assembly can be improved.
(4 marks)

Ways by which the Internally Generated Fund (IGF) of Local Governments can be improved include:

  • Recruitment of quality and competent revenue staff: Hiring skilled personnel to manage revenue collection processes effectively.
  • Outsourcing of revenue collections: Engaging competent commission collectors to enhance the efficiency of revenue collection.
  • Setting revenue targets: Establishing clear revenue targets for revenue collectors to drive performance.
  • Proper supervision: Ensuring effective supervision of revenue staff to prevent revenue leakages and ensure accountability.
  • Rotation of revenue staff: Rotating revenue staff to prevent collusion and complacency.
  • Accurate data collection: Collecting and updating accurate data to improve revenue forecasts and collection strategies.
  • Public education and sensitization: Educating the public on how revenue collected will benefit the community, thereby encouraging compliance.
  • Periodic valuation of taxable properties: Regularly valuing and revaluing taxable properties to ensure accurate property rate collections.
  • Motivation of revenue staff: Providing incentives, including periodic awards, to motivate revenue staff and increase productivity.
  • Introduction of electronic payment systems: Implementing electronic payment systems to make revenue collection more efficient and reduce leakages.

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