The decision by the government to integrate the three main revenue collecting agencies into a single all-powerful Ghana Revenue Authority (GRA) could either turn out to be a phenomenal success, or a monumental failure. In either case, a major determinant will be the extent to which
the Customs, Excise and Preventive Services (CEPS), which accounts for more than 50% of total collections amongst the three agencies, collaborates or not with the integration process.

In the business world, the concept of Mergers and Acquisitions (M&A) is very well understood, best practices have been distilled from real-life experiences, and the do’s and don’ts have been well chronicled in tons of books taught, read, debated and analysed in business schools.

Whereas in Ghana, there have been some examples of mergers, divestitures, corporatizations, de-mergers and other kinds of institutional re-organisation, there doesn’t seem to be a well-compiled body of knowledge on the nation’s experiences on this subject.

A number of lecturers at the Ghana Institute of Management and Public Administration have some knowledge of the subject and make anecdotal references to them in their lectures, but it remains to be seen how the collective wisdom and knowledge of the public sector, academia and industry will be tapped to ensure a very effective integration process.

Surely, the business community which has interacted closely with the three major revenue agencies over the past many years, waits in cautious anticipation of how the proposed integration will enhance not just government revenues but also have a positive impact on their operations. In particular, the public will remember visits made by the President early in the year to some of the revenue agencies and the Port of Tema, where he expressed outrage and concern at various reports of corruption and collusion by uniformed officers. The public also recalls a video shot along the western borders of Ghana by an enterprising journalist which portrayed various customs officers and other businessmen involves in cocoa smuggling operations. The public’s disgust at these examples of unpatriotism makes the government’s bold move to integrate the agencies potentially risky if not well-managed.

In December 2009, the Ghana Revenue Authority Act 791 was promulgated to integrate the national tax revenue institutions namely, the Internal Revenue Service, the Customs,
Excise and Preventive Service and the Value Added Tax Service as one state authority responsible for domestic and international trade revenues.

In the run-up to this development, the Customs Service controlled over 52% of national tax revenue collection and managed a bulk of import and export activity at the nation’s ports and borders, while performing non-revenue duties such as national security.

Generally, Customs authorities traditionally fulfill a three-fold mission - a fiscal mission by collecting revenue for the State; an economic mission by helping businesses to be more competitive and compiling foreign trade statistics; and a mission of protecting society and combating fraud.

However, in the case of Ghana, most people associate CEPS with revenue collection, and very few businessmen have looked up to the CEPS as a source of valuable advice on competition or a critical outfit for obtaining business statistics.

If the business advisory services of the newly-integrated GRA are improved, emphasized and promoted, even as a quasi-consultancy practice that could assist companies to develop feasibility studies and market research, the GRA could very quickly endear itself to the Ghanaian business community.

The Commissioner of Customs, Mr. Ed Richard Kumah Lanyon notes that as part of its change management programme, Ghana Customs adopted in 2004 a Corporate Strategic Plan with a vision is to provide World Class Customs Service, and a mission to collect, account for and protect assigned indirect tax revenues in a timely manner, whilst enforcing, maintaining and protecting community and territorial integrity, facilitating trade, investment and the movement of people and goods across and within the borders of Ghana.

It is notable that the new Director-General of the GRA, Mr George Blankson, is a ten-year veteran of the Value Added Tax Service, where he was its first Deputy Director, when that agency was created in 1999, following the promulgation of the VAT Act on 30th December 1998.

Instructively, Mr Blankson’s previous experience was with the Internal Revenue Service and not with CEPS, implying that he would need to get quickly on top of his brief in managing the agency that currently accounts for more than half of his and government’s annual revenue targets.

Although the CEPS collection is about 52% of total tax revenue from Import Duty, Import VAT, Export Duty, Petroleum Taxes, Import Excise and other taxes, it has relied on The VAT Service to collect Excise Duty on its behalf, except the Excise Duty on Petroleum products.

Between the agencies, the revenues they have collected have financed the country’s recurrent expenditure and development projects in such sectors as sports, education, transport, housing, health, etc. And this fact has in recent years been advertised by the agencies.

According to Dr. Ekwow Spio-Garbrah, who was the first Chairman of the VAT Service Board between 1999-2000, and who had a close working relationship with Mr Blankson and the other revenue agencies:

“Mr. Blankson is a very quiet, competent and methodical man, who I expect to work diligently to develop strong team work amongst the various agencies.

Of course, as an old hand in the system, he is aware of the various intrigues that characterise working in such sensitive institutions. I expect him to succeed if he gets the full support of the GRA Board and the relevant political authorities he has to report to.

One of his obvious tasks is to get the agencies not to turn a blind eye to many of the leakages in the system and to adopt a more assertive style in revenue collection.”  Mr. Blankson was a part of the network of revenue collection officials who played important roles as part of a Public Education Committee for the reintroduction of the VAT, chaired by  Dr. Spio-Garbrah, which ensured the re-enactment of the VAT Law in 1998 after it had been withdrawn in 1995 in the face of public demonstrations.

“In many cases, a good dose of public education is needed by revenue agencies to obtain the active collaboration of the business community as tax payers, and for ordinary citizens to have the courage to report malfeasance by officials. Mr. Blankson knows all the ropes,” added Dr. Spio-Garbrah.

Although the Customs is expected to ensure the protection of revenue by preventing smuggling, this is one area where they are perceived by the public and the business community - indeed by the President - to be the weakest.

As a frontline institution at the country’s frontiers, Customs also plays a key role in maintaining the territorial integrity of Ghana as part of the nation’s security network. In addition to these functions, Customs performs agency duties on behalf of other state institutions by enforcing laws relating to import and export restrictions and prohibitions.


In terms of revenue performance of Customs, total revenue collection in 2009 was GH¢2,083.20 million (90.76%). The collection fell short of the projected target of GH¢2,295.36 million by 9.24%.

Explaining CEPS’ less-than-perfect performance in revenue mobilization, Mr. Isaac Apronti, Deputy Commissioner in charge of Research, Monitoring and ICT notes that government often intervened to maintain low fuel prices in response to public agitations against high fuel costs, and this has often resulted in lower revenue from the petroleum sector.

The dire world economic crises of the last two years affected international trade, and local businesses could only import limited levels of merchandise, leading to low revenues from import duties. Nevertheless, the revised tariffs in the 2008/2009 national budget especially on such goods as rice and sugar tended only to beef up imports without generating additional revenues.
Taking rice as a commodity for illustration, CEPS figures for the last few years show a steady rise in revenues even when levels of imports remained stable. The table and figures below categorically indicate that rice imports from 2007 to August 2010 amount to 2,770,348.28 metric tonnes, with 378.71million Ghana Cedis paid
as tax revenue. Indeed, for the year 2009 only, 779,125.38 metric tonnes of rice was imported with 112.79 million Ghana Cedis paid as tax.

Comparing the 2009 figures to 2008 and 2010 (August) figures it is discernable that despite lower volumes in metric tonnes, duty collected in the two years was higher and this is explained by the fact that government removed duty on imported rice in May 2007 and re-introduced it in January 2010.

Thus, whereas importers took advantage of the zero-rated incentive to import more rice in 2008-2009, with the introduction of the rice tariff of 20% in 2010, volumes have slacked yet government obtains higher revenue. Based on this data, it would seem that a role that the newly empowered GRA could therefore play would be also as an advisor to government, in helping the country to reduce excessive dependence on foreign imports to the detriment of local production.

For foreign investors, who are generally interested in the protection of their financial exposure, CEPS engages in activities such as the granting of exemptions, concessions, permits, registration of customs bonded warehouses, and classification of goods, dissemination of information to ports and stations on Customs operations and any other assignments from the Commissioner. The CEPS, and the GRA, assists qualified investors both domestic and foreign through granting tax exemptions or reliefs by waiving duties/taxes on specified commodities or grant concessions to specific sectors of industry and commerce. But it is not only CEPS that grants exemptions to businesses. Depending on the nature of the item, the exemption granting authorities include the Ghana Investment Promotion Centre; the Ministry of Agriculture; the Ministry of Finance and Economic Planning; and the Ministry of Foreign Affairs.

The scope of tax exemptions targets persons/institutions, specific goods, and sectors of Industry/Commerce including the President of the Republic of Ghana, Diplomatic Missions, Technical Assistance Schemes, the British Council, persons eligible under the Disability Act 2006 (Act 715), churches and religious bodies, trade fair and exhibitions, Volta Aluminium
Company Limited, etc. Specific goods that enjoy exemptions are infant foods, materials and articles covered by Chapter 98 of the Customs Tariff and intended for manufacturing industry when imported by manufacturers approved by the Commissioner, investment and tourism promotion, goods admissible at concessionary duty rates when imported by enterprises under the Ghana Investment Promotion Centre, Act 478.

Others are goods admissible at concessionary duty rates when imported by establishments under the Ghana Investment Promotion Centre (Promotion of Tourism) Instrument, 2005 (L.I. 1817); and Tax exemptions granted as a condition under International Agreement between Government and other parties - e.g., Bui Dam Project, Projects under the Millennium Development Authority, Ministries, Departments and Agencies (MDAs) etc.

Ghanaian and foreign businesses benefit from the fact that CEPS pays Informants’ Award for information relating to un-customed goods, diversion of transit cargo, fraudulent registration of vehicles, abuse of exemptions, etc. that are reported to CEPS. As a result of this practice 38 informants were paid a total of GHC113, 812.80 last year.

The Service publicises the benefits of the award scheme to indirectly generate public support while it holds informants’ identity secret.

This implies that a foreign investor who establishes in Ghana even for the ECOWAS market can be protected from unfair competition to his Ghana-based production from illegal entries from smuggled and contraband products.

As the Customs division of the GRA positions itself to integrate with other tax agencies, the legacy is one of optimism from a background of possessing a strong tax machinery and change management systems that assures all stakeholders of capabilities and capacity to mobilize national tax revenue.

Indeed, this effort manifested in the Ghana Customs attainment of ISO 9001:2008 certifications in February 2010.

The Customs Commissioner envisages that with the introduction of innovative ways to facilitate operations, and adoption of staff codes of conduct and stewardship regimes for its large clientele, the best business practice will be sustained.