Dr. Gideon Boako
Parliament has approved three major digital tax administration agreements aimed at modernising revenue collection, despite strong opposition from the Minority, which has described the arrangements as opaque, costly and potentially burdensome to taxpayers.
The approved agreements cover the deployment of the Sentinel Cross-Border E-Commerce VAT Monitoring and Collection System, a Ghana Domestic Revenue Collection Platform, and the implementation of the Fiscal Electronic Device (FED) Policy for the Ghana Revenue Authority (GRA).
The projects form part of the government’s strategy to improve tax compliance, reduce revenue leakages and strengthen domestic revenue mobilisation through digital technology.
Addressing a press conference in Parliament after the approvals, the Member of Parliament (MP) for Tano North, Dr. Gideon Boako, said the Minority Caucus unanimously rejected all three agreements, insisting that although it supports the digitalisation of tax administration, it could not endorse agreements lacking adequate transparency.
He said the Minority fully supports the use of technology to improve tax compliance, widen the tax base and enhance domestic revenue mobilisation, but opposed what he described as “digital opacity.”
“No responsible policymaker can oppose innovation that genuinely improves public administration,” he said, adding that the Minority’s objection stemmed from unanswered questions surrounding the agreements rather than opposition to digital reforms.
Dr. Boako argued that the Sentinel platform, which is intended to monitor and facilitate VAT collection on cross-border digital services, could expose Ghanaians to double taxation.
According to him, under the proposed arrangement, consumers purchasing goods from foreign online platforms such as Amazon could be required to pay VAT in the country of origin and again in Ghana when the goods are imported.
He said the Minority had repeatedly asked the government to explain how it intended to prevent such double taxation but had received no satisfactory response.
The MP further claimed that the system would increase the cost of digital services and online transactions, including subscriptions to streaming platforms such as Netflix, online advertising and social media promotions.
He argued that although the government had abolished the betting tax, the new VAT arrangements effectively amounted to a “social media tax” that would disproportionately affect young people and businesses operating online.
The Tano North MP also questioned the government’s decision to engage foreign companies to implement the new digital tax platforms instead of relying on Ghanaian technology firms.
He cited previous government digital projects, including GhanaPostGPS and Ghana.gov, as examples of systems developed by local information technology companies.
He expressed concern that a foreign company engaged under the Sentinel agreement could receive up to three (3) percent of the revenue generated through the platform, estimating that the annual payment could amount to about GH¢690 million.
Dr. Boako described the projected payments as an unnecessary financial burden on taxpayers and criticised the outsourcing of key revenue collection functions to foreign entities.
He also questioned the rationale for establishing a new Ghana Domestic Revenue Collection Platform when existing systems, including Ghana.gov, the Integrated Tax Administration System (iTaPS), the Integrated Customs Management System (ICUMS) and the Electronic VAT (e-VAT) platform, were already operational.
According to him, the government had failed to justify why another revenue collection platform was necessary or disclose how much the project would cost the country.
On the Fiscal Electronic Device programme, Dr. Boako said the government planned to procure about 40,000 electronic devices for use in VAT administration but had not disclosed the unit cost of the devices or clearly stated who would ultimately bear the cost.
He said conflicting explanations had been given during committee deliberations regarding whether the government or taxpayers would finance the devices, and called for greater clarity on maintenance arrangements, replacement of faulty equipment and the financial obligations that businesses would assume.
The Minority also criticised the agreements for being multi-year commitments without clearly stating their duration or termination clauses.
Dr. Boako said Parliament should not approve long-term financial commitments without knowing how long the agreements would remain in force or the conditions under which future governments could terminate them.
By Ernest Kofi Adu, Parliament House