Taxes are an unavoidable part of life for individuals and businesses. However, disputes may arise when taxpayers disagree with the tax assessments made by the Ghana Revenue Authority (GRA), the main body responsible for tax collection in the country. Such disputes can occur due to errors, misinterpretation of tax laws, or incomplete information, resulting in incorrect tax assessments.
This requires a formal framework for resolving tax disputes. In Ghana, the Revenue Administration Act, 2016 (Act 915) and the High Court (Civil Procedure) Rules, 2004 (C.I. 47) provide the legislative and procedural guidelines for resolving tax disputes. This article aims to provide an overview of the tax dispute resolution process, highlighting the key mechanisms and procedures in place to ensure fairness and justice for all parties involved.
- Challenge to the Commissioner-General of GRA
Before a taxpayer can dispute a tax assessment, the Commissioner-General of the Ghana Revenue Authority (GRA) must have made a tax decision. This decision can take the form of:
– A notice of assessment served on the taxpayer
– A written notice of the decision served on the taxpayer
However, not all communications from the GRA constitute a tax decision. For example, practice notes or class rulings that guide tax assessments are not considered tax decisions and cannot be challenged. Also, if a tax law specifies a timeframe for the Commissioner-General to make a decision and that timeframe expires, the taxpayer can choose to treat the decision as unfavorable and challenge it.
When a taxpayer is dissatisfied with a tax decision, they can lodge a written objection with the Commissioner-General within 30 days of being notified. The objection must clearly state the grounds for the dispute. The taxpayer can also request an extension of time to file the objection before the 30-day period expires. However, the Commissioner-General will only entertain the objection if the taxpayer has paid all outstanding taxes, including either the full amount of tax in dispute (for import duties) or 30% of the tax in dispute (for other taxes).
The Commissioner-General has the discretion to waive, vary, or suspend the payment requirement pending the determination of the objection. Once an objection is filed, the Commissioner-General will consider it and may vary the tax decision or disallow the objection. The Commissioner-General must serve the taxpayer with a notice of the decision, including reasons, within 60 days of receiving the objection, and where he fails to respond to an objection within 60 days, the taxpayer may treat the silence as an unfavorable decision which can be appealed.
- Appeal to the Independent Tax Appeals Board
A dissatisfied taxpayer can appeal to the Independent Tax Appeals Board within 30 days of the Commissioner-General’s decision. The Board’s primary function is to hear and determine appeals against tax decisions made by the Commissioner-General. The Board comprises members appointed by the Minister of Finance, including lawyers, tax practitioners, and accountants.
During the appeal proceedings, the taxpayer (appellant) bears the burden of proving that the Commissioner-General’s assessment or decision is inaccurate. The Board may confirm, reduce, increase, or annul the assessment appealed against, or make any order it considers fit. The Commissioner-General is required to amend the assessment accordingly and the taxpayer may also withdraw the appeal at any time before a decision is made.
The Tax Appeals Board delivers its decision in writing at the end of the hearing and serves copies of the decision to the parties involved. Failure to comply with the Board’s order without reasonable excuse is an offense, punishable by fines. Notably, appealing an objection decision does not automatically suspend the Commissioner-General’s decision; unless the Board grants a stay of execution, the decision can be enforced during the appeal process.
- Appeal to the High Court
A person dissatisfied with the Tax Appeals Board’s decision can appeal to the High Court within 30 days of receiving the decision. The appeal must state the grounds of appeal and attach the decisions of the lower tribunals, including the Commissioner-General and the Tax Appeals Board.
Before the High Court hears the appeal, the appellant must pay at least 25% of the disputed tax amount for the first quarter of that year. However, this requirement may be waived if the appellant has already paid the 30% deposit required when challenging the Commissioner-General’s decision.
The High Court may recommend alternative dispute resolution mechanisms, such as arbitration, mediation, or negotiation. If the parties reach a settlement, the terms will be recorded by the judge as the judgment of the court.
As an appeal, this option will allow the court to open up the matter to evaluate the evidence and assess the soundness of the judgment of the lower court based on the evidence presented.
- Application to the High Court for Judicial Review
The High Court has supervisory jurisdiction over lower tribunals, including the Independent Tax Appeals Board and the Commissioner-General. A person can apply to the High Court for judicial review of a decision made by these bodies. Judicial review allows the High Court to evaluate the decision-making process and ensure that it was fair, reasonable, and lawful.
Judicial review can take the following forms:
1. Certiorari: an application to challenge and quash the Commissioner General’s tax decision
2. Mandamus: to force or compel the Commissioner General to perform a legal duty
3. Quo warranto: to challenge the authority of the Commissioner General.
4. Prohibition or Injunction: to prevent or restrain the Commissioner General from taking certain tax decisions.
In all these cases, the taxpayer must show that the Commissioner-General violated clear provisions of the tax law in arriving at a decision or in exercising his powers or that he did not give the taxpayer fair hearing.
Navigating tax dispute resolution mechanisms requires prompt action. With time limits of usually 30 days, taxpayers must act swiftly to challenge decisions made by tax authorities. Failure to do so may result in lost rights, unless extensions are granted. A key takeaway for taxpayers is to act promptly when dissatisfied with tax decisions to preserve opportunities for redress.
Alhassan Aboagye on behalf of OSD and Partners. [email protected]
