Presentation By: Iris Botchway & Edwin Acheampong 12/5/2018 THE EFFECTIVE IMPLEMENTATION OF ELECTRONIC FISCAL DEVICES (EFDs) AND THEIR IMPACT ON VAT ADMINISTRATION IN GHANA Presentation By: Iris Botchway & Edwin Acheampong 12/5/2018

INTRODUCTION

Introduction… The Electronic Cash Registers (ECRs) were first introduced on a Pilot Basis in the Accra Commercial Districts in September, 2009 but had to be discontinued nine months later

CHALLENGES WITH ECRs

Challenges with ECRs Poor data connectivity in some geographical areas Slow terminal initialization Till receipts issued from terminals were not recognised and accepted by the trading public

Challenges with ECRs Traders refused to participate after a while because rival competitors not included in the pilot which was voluntary Staff Support were inadequate as Staff considered their roles in the ECR implementation as periphery to their normal schedules There was no legislation backing the piloting of the ECRs

Challenges with ECRs The operation of the ECR was sole sourced, which affected the effectiveness of the project The SIM card in the ECRs could be used for a phone and some taxpayers used them as such The ECRs were not well taken care of by the traders

GOVERNMENT POLICY STATEMENT

Government Policy Statement The government of Ghana is committed to introducing the Fiscal Electronic Device (FED) by the end of October, 2018

PREPARATIONS SO FAR…

Preparations so far There is a local consultant to see to the smooth implementation of the FED Study tours were made to Fiscal countries in Africa, namely; Rwanda, Kenya, Tanzania and Malawi to learn from their operations The Taxation (Use of Fiscal Electronic Device) Act, 2018 (Act 966) has been passed. Date of Presidential Assent: 4th May 2018

Preparations so far… Staff of Ghana Revenue Authority were sensitized on FEDs A separate Unit will be established to operate the FED with a defined organogram and staff An Implementation Committee has been set up to sensitize and educate the public through adverts, radio and TV programmes, jingles, etc.

HOW THE LAW WILL BE IMPLEMENTED

How the law will be implemented The first batch of taxpayers to use the FEDs will be taxpayers of the Large Taxpayer Office (LTO) It is envisaged that after 3 months, the next users of the FEDs will be Medium Taxpayers …And finally, Small Taxpayers

How the law will be implemented… For the moment, it is restricted to VAT- registered taxpayers

CONCLUSION

Conclusion Implementation of the FED will be a turning point in VAT administration for GRA: VAT Revenue Collection is expected to improve significantly – Minimal or elimination of parallel invoicing Real time monitoring of sales trends of VAT-registered taxpayers Access to accurate record of the volume of sales of each taxable person VAT Enforcement and Compliance Management will improve – Record keeping is expected to improve among wholesalers and retailers

Conclusion… Critical sections of Act 966: Obligation to use the FED – Issuance of the fiscal receipt for sales transaction Record to be kept by FED user Maintenance of records extracted from the FED How to handle defective or malfunctioning FEDs Supply of FED and Requirements for Supply – Qualification for licensing as FED supplier Application for licence as a FED supplier Issue of licence Renewal of licence Revocation of licence

Conclusion… Critical sections of Act 966: FED Manufacturer – Qualification of manufacturer of FED Selection of manufacturer of FED Communication Service Provider and their Obligations – Modalities for engaging a Communication Service Provider Miscellaneous Provisions – Technical Committee Obligation of purchaser to collect receipt Offences Compounding of offences Transitional Provisions Commencement

Thank You

Q & A