The Ghana Revenue Authority (GRA) has recovered GHS 1.3 billion in outstanding Value Added Tax (VAT) from the Electricity Company of Ghana (ECG). This significant recovery addresses a substantial portion of the GHS 1.4 billion initially owed by the state-owned power distributor.
Commissioner-General Anthony Sarpong disclosed this information to Parliament’s Public Accounts Committee. He explained that the ECG had faced challenges remitting the full VAT amount it collected on behalf of the state. The power company argued its collection systems did not allow it to recover all VAT charged to customers.
This recovery is crucial for Ghana's public finances, especially as the government seeks to improve domestic revenue mobilization. Increased tax collection is vital for funding public services and reducing reliance on borrowing. Ghana's economy has faced pressures, making robust tax compliance a priority for fiscal stability.
“As of today, of the GHS 1.4 billion, we have recovered GHS 1.3 billion of that, which is about 86.56 per cent of what is there,” Commissioner-General Sarpong told the committee. He added, “We’ve made some good progress, and we are still engaging them to improve the situation.” This statement underscores the GRA's commitment to ensuring all collected taxes reach state coffers.
The GRA will continue its engagement with the ECG to recover the remaining GHS 100 million. This ongoing effort aims to resolve the underlying issues preventing full VAT remittance. Improved collection mechanisms could prevent similar accumulations of outstanding tax liabilities in the future. Decision-makers will closely monitor the full resolution of this outstanding amount.
The ECG’s argument that it could not collect the full VAT amount raised questions from the Public Accounts Committee. Committee Chair Abena Osei Asare questioned this explanation, noting that VAT components are clearly displayed on electricity bills. This highlights the need for transparency and efficiency in tax collection processes across all state entities.
Commissioner-General Sarpong clarified he was explaining the ECG’s position to the GRA, not speaking for the ECG itself. He reiterated that the ECG’s existing collection mechanisms were cited as the reason for the shortfall. The difference between VAT levied and VAT collected consistently built up over time, creating the large outstanding amount.
The GRA has intensified its engagement with the ECG over the past year and into 2026. This focused effort directly led to the recovery of most of the identified outstanding amount. The recovery of GHS 1.3 billion represents a significant achievement in tax enforcement. It also signals the GRA’s resolve to pursue all outstanding tax liabilities from institutions.
This situation underscores the broader challenges the GRA faces in ensuring timely and complete remittance of taxes collected by various institutions. The authority continues to implement strategies to enhance compliance and accountability. These efforts are essential for strengthening Ghana's fiscal position and ensuring equitable tax contributions from all entities.