The arrest of the two Chinese and the Lebanese was prompted by the Ghana Revenue Authority (GRA).

The VAT Act of 2013 (Act 870) makes it obligatory for business operators to pay tax and issue VAT invoices to prospective buyers and thereafter make statutory payment to the GRA.

The indicted Chinese operate in bags and toys, while the Lebanese trades in vehicle spare parts.

The arrest of the three was part of the GRA’s compliance and enforcement exercise commenced this month.

The exercise involves the invigilation of shops, mystery purchases and swoops across the country by GRA officials to ensure maximum compliance.

VAT invoices

The Head of Enforcement at the Accra Central Area of the GRA, Joseph Annan, said the exercise followed revelations that some businesses were either not issuing VAT invoices or misreporting to avoid paying the appropriate revenue to the state.

He said intelligence available to the GRA also showed that most consumers did not bother to demand and take VAT invoices, making it easier for sellers to undercut the state.

Mr Annan said the authority would do a preemptive assessment on the businesses and recommend a full audit to be conducted to make sure every amount was paid.

He said the GRA was also going to commence full audit on the companies and apply all the penalties and the interest that were applicable “because once VAT is being under-declared, it means the other taxes too will suffer same”.

He said seven defaulters had already been arrested since the commencement of the exercise and were still under investigation.

Sanity

Mr Annan said the GRA would continue with the exercise until all taxpayers complied dutifully.

“At times, these things create inconvenience for all of us. We are not happy doing these things, but at some point, we need to apply the law. We are not happy to come to your shops unannounced but the point is that we will not come if you are doing things right,” he said.

“And we are going to continue until we bring some sanity into the system. So all those who are registered must issue VAT invoices because you will never know when we will come to you,” he added.