Finance minister, Ken Ofori-Atta has disclosed that government has set up another Alternative Dispute Resolution (ADR) mechanism to mediate tax disputes before the need for litigation to ensure efficiency in tax administration.
The mediation process is expected to be undertaken by the independent Appeals Board. This is to complement the existing Tax Dialogue that has been in operation since early this year.
Ofori-Atta made this known at a programme to highlight successes chalked by Tax Dialogue, in Accra.
He noted that, Cabinet has approved the Appeals Board and the ADR Bill, which currently is at the Attorney-General’s Department and is expected to be passed by Parliament by the end of the year.
“The benefits of the Appeals Board, as compared to the court system, include faster resolution, reduced cost of dispute and confidentiality,” the Minister said.
In addition to the ADR mechanism, the formation of the Tax Dialogue will create a forum for key counterparts in tax administration to meet periodically to discuss and resolve tax administration issues in a timely and friendly manner.
All of this forms part of the measures and structures that government intends to use in handling tax issues swiftly and fairly to preserve the integrity and fairness of the tax system.
As efforts are being made to improve revenue generation in the country, there is a likelihood of tax disputes increasing, hence, where such disputes remain unresolved, the associated revenue gets locked up, the Minister stated.
Reports indicate that, in 2013, 95 percent of Canada’s tax disputes were resolved through ADR. The number of tax disputes that were resolved by alternative dispute mechanisms was 85 percent and 75 percent for Australia and Brazil respectively.
Also, in Africa however, 66 percent and 36 percent of tax disputes were resolved in South Africa and Kenya respectively.
Towards the achievement of the revised revenue estimate, which was slashed down from GHS 51, 039.1 million to GHS 50, 686.2 million (0.7 percent), Ofori-Atta noted that a number of administrative measures are required, including; the intensification of tax compliance measures and plugging of existing revenue leakages, as well as intensification of audits in all sectors and the prosecution of tax evaders and corrupt tax officials.
Further measures include, the full implementation of excise tax stamps policy, monitoring of the downstream petroleum sector and introduction of the Cargo Tracking Note.
Ofori-Atta indicated that, the Tax Dialogue has successfully led to the improvement in the speed of payment of VAT refunds, and the development of an institutional database for tax rulings to avoid duplicating and conflicting outcomes.