On Monday, May 31, the Ghana Revenue Authority announced through a Facebook post that beginning this month it will no longer receive payment in cheques. Taxpayers are thus required to meet all tax obligations online or via the banks.
“Starting 1st June 2021, GRA stops receiving Cheques in all Domestic Tax Revenue Division (DTRD) offices,” the Facebook post read.
This move forms part of the government’s digitization efforts to make tax payment convenient and to prevent tax evasion. The Ghana Revenue Authority is envisaging a complete move from the receipt of cash at its offices to a cashless system by the end of the year.
GRA goes Cashless – What pertains Globally
With the rollout of this digitization effort, one can’t help but wonder if the cashless service will indeed create the ease and convenience of meeting tax obligations. Countries all over the world are embracing digital technology to get taxpayers to fulfil their tax obligations without the headache of having to face long bureaucratic processes.
A specific example of the notable impact of digital progress on filing taxes is Beijing. World Bank report in 2004 states that businesses in Beijing spent 832 hours a year on average to prepare, file, and pay taxes. They had to make 37 payments but by 2018, the number had reduced to 138 hours a year and 7 payments.
Paying Taxes 2020, also reiterates how world economies are harnessing technology to create ease in honouring tax obligations. The report states this:
“Overall, the global average of compliance burden for business taxation remained relatively stable across the four key measures used to evaluate the ease of paying taxes for businesses: time to comply (234 hours); the number of payments (23.1); total tax and contribution rate (40.5%) and a post-filing index (60.9 out of 100).”
Since 2012, the average time to comply with tax obligations is 27 hours shorter and an average of 4.4 fewer payments are required. Technological advances drove both improvements”.
GRA goes Cashless – Implications on Businesses
It is obvious that digital technology is improving tax compliance globally. Hence, safe to say that Ghana Revenue Authority is on the right path in making tax payment easy and convenient for businesses. Businesses will thus spend fewer hours filing their tax obligations and have the convenience of doing so. With the introduction of online payment systems such as MoMo and banking apps, GRA must integrate its payment systems with other digital payment platforms in the near future. This will create further ease in tax compliance for businesses and enhance their revenue mobilisation.
Rita Ramalho, Senior Manager of the World Bank’s Global Indicators Group, couldn’t have put it any better when she said “If paying taxes is seen as easy, straightforward, and fair, it will reflect well and can generate support for the collection of revenues that are important to providing much-needed services.”
Other Relevant Online Tools for Businesses
In addition to the deployment of online payment platforms, GRA on its website has other relevant online tools to help taxpayers meet their tax obligations. For instance, the online tax calculator helps to compute your net income, PAYE income tax, SSNIT deduction among others with ease.
Despite these digital tools to help in the ease and convenience of tax payment, it is meaningless if taxpayers are unable to use these digital platforms hence education and a sensitization program are highly required. Ghana’s economy is driven largely by the informal sector with most having little to no formal education. GRA must sensitize and educate the populace about the use of digital platforms to ensure a completely cashless system in tax administration.
Also, according to the report by PwC and the World Bank, “ It is important for tax administrations to keep up to date with developments in technology and to exploit these for the benefit of themselves and taxpayers. Businesses, for their part, should incorporate new tax technology into their operations to respond to the increased demand for data from tax administrations.”