The Ghana Revenue Authority (GRA) is set to fully digitise its application process for treaty benefits. This new system will make it easier for taxpayers and international companies to apply. Nana Mensah Otoo, Head of the GRA’s International Tax Office, announced the plan. The goal is to make the process quicker and more accessible.
This digital transformation aims to lower costs for businesses. It will also provide more certainty about tax treatment. Companies will find it easier to get the tax relief they are entitled to under international agreements. Currently, verifying residency with partner countries can cause delays. A key issue is that many applicants do not include all necessary contract details or required documents like withholding receipts, which slows down approvals.
Ghana’s tax landscape is changing significantly. The GRA is embracing international tax cooperation and local reforms. Ghana has signed the ECOWAS Treaty to boost trade within the region. However, this treaty still needs parliamentary approval. A new United Nations Framework Convention on International Tax Cooperation is also being developed. This framework seeks to create a fairer and more effective global tax system. Ghana is also looking at taxing digital assets. A new rule called a "significant economic presence" test will capture income from digital services. This test is needed because old rules struggle with remote service delivery.
Daniel Nuer, a Technical Adviser at the Ministry of Finance, stated that an intergovernmental committee is working on the UN tax convention. He expects it to be ready for the UN General Assembly by September 2027. Mr. Otoo added that Ghana has initiated 36 Double Taxation Agreements (DTAs). Fourteen of these agreements are already active, including with countries like the UK, Germany, and France. These DTAs help prevent paying tax twice on the same income. They also help stop tax evasion and give cross-border investors more clarity.
DTAs usually offer relief on withholding taxes. They clarify rules for having a business presence in another country, known as a permanent establishment. These agreements also improve how tax disputes are resolved. Businesses can use them to plan investments better and send profits home more easily. They help multinational companies avoid paying too much tax.
However, businesses still face challenges. Interpreting treaty rules and navigating administrative steps can be difficult. Dawda Mohammed Hafisdeen, a tax practitioner, noted that many businesses are unsure if their activities create a permanent establishment. This uncertainty affects their tax liabilities. Complex contracts, especially those involving installation services, can also create confusion. Resolving tax disputes can take a very long time, sometimes up to five years. This lengthy process undermines the certainty that DTAs are supposed to provide for investors.
Despite these challenges, Mr. Otoo reassured the private sector. The GRA is committed to making it easier to do business in Ghana. He emphasized that the GRA supports investment. The authority reviews contracts carefully to ensure they align with business activities before approving treaty benefits. The GRA acknowledges the practical problems businesses encounter. They urge taxpayers to be transparent and keep good records of all their transactions with tax authorities.