In Africa alone, an estimated USD 50 billion is lost each year due to fraud and tax avoidance. Africa has the potential to raise tax revenue from many untapped sources on the continent. Countries can increase their focus on high net worth individuals (HNWIs) and companies, strengthen tax audits, simplify tax systems and modernise tax collection.
It is the responsibility of government to ensure that the correct amounts in tax revenue are collected. As this proves to be more and more of a challenge, they need to rethink their tax collection methods to ensure that better, less onerous and more modern tax collection systems and processes are in place.
Ghana is one of the countries that has been grappling with fiscal discipline. An International Monetary Fund (IMF) team has conducted the second review of Ghana’s financial and economic programme under the Extended Credit Facility (ECF) programme, which seeks to stabilise the economy and restore fiscal credibility. Although the IMF has expressed satisfaction with Ghana’s performance, it still has to maintain tight fiscal discipline, without sacrificing growth. Reforms by the Ghana Revenue Authority (GRA) are helping to rake in more revenue. Such reforms are very important for the country to consolidate itself as a middle-income country. A new Revenue Administration Bill has been tabled before Parliament as part of the efforts to revamp the country’s fiscal laws and bring them into line with modern trends.
The GRA has urged consumers to be more diligent and insist on tax invoices when they undertake any business transaction which attracts taxes. That, according to the tax administrators, will help check tax evasion and tax underpayments by businesses. At a recent seminar organised by the GRA in Accra for taxpayers, aimed at improving revenue mobilisation, Dr Dela Heloo explained that “Paying more attention to receipts and tax invoices would result in an improvement in tax laws compliance.”
In accordance with the tax laws in Ghana, every individual with taxable income is obliged to furnish a tax income return to the GRA each year for assessment. This and the audit trail established by receipts for goods purchased help to keep a good record of financial transactions during auditing.
Global Voice Group’s (http://www.globalvoicegroup.com) technological partner, Avatar Technologies (http://www.avatar-technologies.com/), offers the only Electronic Fiscal Solution designed to address tax compliance issues successfully in both developed and developing countries. This cloud-based and highly secure solution works in real time to create an environment that promotes tax compliance and benefits both taxpayers and governments. Although tax compliance is a worldwide issue, it is particularly problematic in developing and emerging countries where the difference between the VAT due to the State and that actually collected is 50%-60%, compared with 7%-13% in developed countries. This is a significant difference and means that governments are missing out on a huge amount of revenue. As a result, they are severely hampered in their efforts to put in place progressive tax systems and in attempting to address priority development issues in their countries.
Avatar Technologies provides governments and revenue authorities with a sales and fiscal information platform where:
• sales and tax data are gathered at the source of the transaction and transmitted securely to government revenue databases in real time
• merchant identities are authenticated prior to the transaction and each transaction receipt is verified through highly secure and sophisticated digital signatures
• fiscal information is analysed automatically for accurate and valuable decision-making by the revenue authorities
Avatar Technologies’s EFD solution is simple and affordable. For businesses, tax compliance may be as simple as adopting the company’s 5th-generation sales-recording devices, which are affordable, user-friendly and come with free access to a useful online accounting application. Already-existing devices and smartphones can be seamlessly integrated into the solution. Furthermore, the sales-recording devices have a high level of autonomy, are robust and allow for both remote audit and activation, which means they can be used in businesses located in remote areas. It is estimated that electronic solutions to help standardise tax collection and decrease tax fraud/evasion could increase tax revenues in 12 months by 2% to 10% depending on the sophistication of the tax collection system already in place.
There is currently global interest in the potential of fiscal lotteries to curb tax evasion and increase government tax revenue. Fiscal lotteries aim to curb informal business-to-consumer transactions by encouraging consumers to claim their sales receipt, which doubles up as a lottery ticket giving the holder a chance to win a prize. Various countries have implemented a fiscal lottery programme to optimise VAT compliance and collection. One example is Malta, where recent figures published by the National Statistics Office show that thanks to the fiscal lottery, the Maltese government’s total VAT revenue had increased by 12.7 % from January to May 2014 compared to the same period in 2013.
Through its integrated Fiscal Lottery system, Avatar Technologies’s solution rewards consumers who request their tax receipt after making a purchase. It is crucial to involve the customers as they have the power to motivate traders to comply—simply by claiming their purchase receipt.
In light of the above, it is simple to see that Avatar Technologies’s EFD solution can effectively support the tax system of emerging and developing countries such as Ghana. The solution is simple and affordable, and promotes fairness and transparency, thus supporting the World Bank’s three pillars of reform. It is more than a tax management system, as it provides government with an innovative financing mechanism enabling it to secure funds for development while compensating for dwindling foreign aid.
 Assistant Commissioner of the Compliance, Enforcement and Debt Management Unit of the GRA.
 Sales tax
 Electronic Fiscal Devices
 The World Bank’s three pillars of tax reform are “simpler and cheaper”, “fair” and “transparent”. Electronic tools have proved to be the best way to achieve better control of taxation in this way, provided they have been specifically adapted to the country’s actual environment.