Parliament has approved a multi-year expenditure commitment by the government, through the Ministry of Finance, for the development, implementation and deployment of digital and electronic platforms to enhance revenue generation.
The approval followed the adoption of the Finance Committee's reports on Tuesday.
Under the arrangement, a service provider would be engaged to support the implementation of the Ghana Revenue Authority (GRA)'s Fiscal Electronic Device (FED) policy, while Principal Consult Limited would develop, implement and deploy a cross-border e-commerce Value Added Tax (VAT) monitoring and collection system.
The government would also engage another firm, through a competitive process, to develop and deploy the Ghana Domestic Revenue Collection Platform to strengthen domestic revenue mobilisation.
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According to the committee's report, 40,000 Fiscal Electronic Devices would be deployed after the pilot phase of the FED policy ends next month.
The report said the policy had the potential to reduce Ghana's VAT gap and generate an additional GH¢7.2 billion in VAT revenue annually.
It further indicated that the cross-border e-commerce VAT monitoring and collection system, expected to be implemented in September this year, could generate an additional GH¢3.2 billion in VAT revenue.
The committee said the system would also help address revenue leakages through real-time transaction monitoring and automated compliance mechanisms.
The Deputy Minister of Finance, Mr Thomas Nyarko Ampem, said seeking Parliament's approval for the multi-year expenditure commitment was in line with the Public Financial Management Act.
"Mr Speaker, currently we see a lot of retail shops taking VAT but not remitting to the state. This FED system is going to stop that and is going to help us improve on our VAT revenue," he said.
Mr Ampem explained that the government could not indicate all the companies to be engaged for the project because procurement would be done competitively.
He said Principal Consult Limited had demonstrated its capacity during the pilot phase of the cross-border e-commerce VAT monitoring and collection system by helping the government collect existing revenue that had previously gone uncollected.
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However, the Minority Caucus opposed the approval and demanded details of the procurement process and the financial implications of the projects.
Contributing to the debate, the Member of Parliament (MP) for Ofoase Ayirebi, Mr Kojo Oppong Nkrumah, called on the government to disclose the model, total cost and multi-year financial implications of the development, implementation and deployment of the digital and electronic platforms.
According to him, approving the commitment without those details would make Parliament appear to be a rubber stamp.
He, therefore, urged the Majority Caucus to stand down the motion until the necessary disclosures had been made.
The Member of Parliament for Tano North, Dr Gideon Boako, also cautioned that the cross-border e-commerce VAT monitoring and collection system could result in double taxation of Ghanaians because of the application of the origin and destination principles of taxation.
