It is emerging that Illicit Financial Flows (IFF) is one of the pressing issues on the radar of the new Acting Commissioner-General of the Ghana Revenue Authority (GRA).
Given the huge negative impact of Illicit Financial Flows on Ghana’s economy and revenue mobilization in general, the Acting Commissioner-General has vowed to intensify efforts to crack down on the situation.
Anthony Kwasi Sarpong announced this commitment when he interacted with The High Street Journal’s X Spaces Conversation on Ghana’s revenue administration. Organized in partnership with Norvanreports and IMANI Africa, the maiden edition was themed “Resetting Ghana’s Revenue Mobilization.”
Illicit Financial Flows: The Forms
Anthony Sarpong revealed that the menace is mostly recorded in two forms. It either takes the form of illegal financial transactions, which mostly go untaxed, or goods that are smuggled through unapproved routes into the country. This, he says, also escapes taxation.
He admits that this illegal movement of money and goods is not only undermining tax collection but also threatening the survival and growth of Ghanaian businesses and the national economy.
“This is one area that is not only a matter of tax issue, but it’s also about the survival and growth of our national economy through businesses,” he remarked.
He explains that, “illicit flows may come in the form of financial flows or it may come in the form of smuggled goods in and out of the country. And if you take, for instance, smuggled goods coming to the country, because they’ve been smuggled and they’ve not paid their rightful taxes.”
The Impact
The Acting-Commissioner General further enumerated the economic and revenue impact of the menace. Aside from the taxes these IFFs evade, it is a major threat to the economy, its growth, and development.
He says it creates an unfair advantage for the perpetrators against the law-abiding individuals and businesses. When these people smuggle goods and evade taxes, it creates an uneven playing field between compliant businesses and those cutting corners. The ripple effect is job losses, business stagnation, and ultimately, a decline in national revenue.
These illegal activities, he says, if left unchecked, would lead to the shrinking of the country’s tax base, collapse of legitimate businesses, and worsening unemployment.
“What it does is that it creates indifference between those who have paid their taxes and those who have not. It’s a challenge for those who are rightfully running their businesses and paying their taxes against those who are not,” he indicated.
He continued, “ If you extend that, what it will also mean is that it will affect unemployment or employment level, because for businesses that are properly operating, if their business does not grow, then automatically as business entities, they are likely to shed employment.”
The Crackdown Efforts
To address the growing threat, the GRA boss says efforts are already underway to strengthen its collaboration with the National Security and other enforcement bodies. He reveals there is A multi-agency committee comprising the National Security Secretariat, the Ghana Immigration Service, the Financial Intelligence Centre, and other key institutions already in place to clamp down on such activities.
He emphasizes that clamping down on illicit financial flows is not a one-off operation but a long-term priority for the Authority.
He says the authority is “working together with other security agencies. We already have in place a committee that is comprised of the National Security, Immigration Service and the Financial Intelligence Centre, and other security agencies, so that we work hand in hand.”
He adds, “this is a focused area for this year and for all years to come, because if we don’t tackle this area, what it means is that businesses and individuals who are paying their taxes will be challenged, their businesses will dwindle, they will not be sustainable, and ultimately the source of tax income will go down. So this is hand in hand, an important element of our role that goes hand in hand with tax revenue mobilisation.”
Anthony Sarpong’s commitment to clamp down on the menace underscores the GRA’s quest to create a fairer, more transparent tax environment that supports honest businesses, drives sustainable economic growth, and ensures that every entity contributes its fair share to national development.
