Electronic VAT Invoicing - Understanding the Basics

The Ghana Revenue Authority’s 4th Strategic Plan outlines strategic initiatives to improve domestic revenue mobilization. A pivotal component of this plan is the introduction of an Electronic Value Added Tax Invoicing (E-VAT) System; designed to streamline VAT revenue collection and complement existing efforts.

In line with the initiative, GRA piloted the E-VAT system in 2022 with 50 VAT-registered taxpayers. This was followed with the first phase of implementation in June 2024, with the successful onboarding of about 600 VAT-registered taxpayers.

The second phase of the project commenced in September 2024 and is expected to onboard more than 2,000 VAT-registered taxpayers by December 2024.

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What is E-VAT?

E-VAT?is an electronic means of issuing VAT receipts or an electronic invoicing system for VAT-registered businesses.? E-VAT is not a tax, but an improvement on how VAT transactions are invoiced.

The system, also referred to as the Certified Invoicing System was introduced as an improvement on how VAT transactions are invoiced and accounted for.

The system applies to both VAT Flat Rate and Standard Rate schemes including the following components in VAT Computation:

• Ghana Education Trust Fund Levy (GETFUND) – 2.5%
• National Health Insurance Levy (NHIL) – 2.5%
• COVID-19 Health Recovery Levy (CHRL) – 1%

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Types of E-VAT System

There are two E-VAT systems, namely:?

1. All-Round E-Invoicing System: This system is installed at no cost to the VAT-registered business which does not have an existing invoicing system.
2. Integrated E-Invoicing System: This system is integrated with a business’ existing invoicing system.

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The benefits of E-VAT System

• Streamlined refund processes – The certified invoicing system has been designed to make the VAT refund process easier. GRA verifies and stores all invoices and has data of any VAT refund in the E-VAT system.
• Reduced compliance cost – Businesses save time and money by reducing the workload in VAT calculations and processing data for filing and payment thus helping taxpayers to avoid penalties and interest due to late submission.
• Reduced audit hours – Since the Authority has all relevant data readily available, audits are conducted quickly thereby allowing business owners to concentrate on growing their business, without the burden of allocating time for periodic audits.
• Improved record keeping –The system helps prevent data loss and simplifies bookkeeping in line with provisions in the Revenue Administration Act 2016 (Act 915) which requires taxable persons to maintain records for at least six years.
• Fair and equitable VAT regime – The system ensures that all VAT-registered taxpayers accurately charge and account for the VAT collected, thus promoting a fair and transparent tax regime.

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What you need to get started

For VAT-registered businesses to be onboarded onto the E-VAT system, the following will be required:

1. ?Company Taxpayer Identification Number (TIN)
2. Company branch details (Number of sales points, average invoices per month)
3. Details of the contact person and the System Administrator
4. Method of Invoicing (manual or electronic)

If electronic:

1. The Enterprise Resource Planning details or Point of Sale (Name, version, Deployment Type, etc.)
2. The contact of the business’ Enterprise Resource Planning or Point of Sale service providers.

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