The Ghana Revenue Authority (GRA) enforcement operation has led to the arrest of a total of 48 business operators for allegedly failing to issue value added tax invoices to their patrons against the law.
Those arrested were part of 93 businesses out of 115 found not to be issuing VAT invoices to customers who patronised their services.
The illegalities were discovered through undercover investigations known as mystery shopping or text purchase, after undercover officials of the GRA visited 115 companies in a week.
Since May 16, 2023, a special force from the authority, in collaboration with the police, has been embarking on an operation targeting operators of the 93 businesses.
Between May 16 and May 31, a total of 44 business managers were arrested in separate enforcement exercises.
The task force yesterday arrested the managers of four businesses after visiting the offices of Buildmart Ghana at Adabraka, who are dealers in paints and other building materials; Excellence Boutiques on the Spintex Road, Bedarts Cold Supplies at Lashibi and Yat Ventures at Mamobi.
The Manager of the Accra Central Enforcement Unit of the GRA, Joseph Annan, who led the team for the exercise, told journalists that all those arrested were not complying with section 41 of the VAT Act which mandated a registered business to issue VAT invoice at all times.
He said the arrested culprits would be handed over to the police, investigated and charged with their actions.
He said as part of their investigations, officers of the Criminal Investigations Department of the Ghana Police Service would take the statement of those arrested after which the pre-emptive assessment would be established and the businesses would be required to pay immediately.
“After that, the business would be recommended for full audit while the police continue with its investigations,” he said.
Mr Annan said so far, none of the business owners arrested, since the beginning of the exercise, had been prosecuted, “you know it takes time to build a docket. Some of them are asking for leniency but that decision can only be taken by the top managers of the authority.”
The exercise started with test purchase where GRA officers visited the businesses and did undercover purchases to test whether the business was voluntarily complying and if they are not complying, we arrest them for noncompliance.”
He said once a business fails to issue a VAT invoice in accordance with section 41 of the VAT Act “’it has committed an offence for which they have to be arrested and that is what we are doing now”.
“When you are arrested you go and make your statement with the CID and then the process continues”, he said.
In October last year, the Labone, Spintex, Atomic roundabout and Weija branches of Palace Mall were shut down by the Ghana Revenue Authority for non-compliance with the authority’s E-VAT Invoicing system.
According to GRA, a number of selected shops have deliberately failed to issue VAT invoices electronically when customers walk in to make purchases.
The GRA says the failure of these shops to abide by its directive sends signals that they are under-declaring tax.
The Weija branch of China Mall has also been shut down, bringing to five, the total number of China Mall branches closed down in the last 24 hours.
At the Labone branch of Palace Mall, managers of the facility locked themselves inside the shop while observing officials from GRA who were embarking on the enforcement exercise.