Ghana Revenue Authority Arrests China Mall Officials in Undercover E-VAT Enforcement Operation

The Ghana Revenue Authority (GRA) has arrested officials from three China Mall branches following an intelligence-led undercover operation that allegedly uncovered sales transactions deliberately withheld from the government’s electronic tax invoicing system, authorities said.

The operation, conducted simultaneously at outlets in Ashaiman, Weija, and Nsawam, represents a significant escalation in the GRA’s enforcement of the Value Added Tax Act, 2025 (Act 1151), which took effect in January and introduced stiffer penalties for tax evasion.

Mystery Shopping Exposes Discrepancies

Revenue officers posing as ordinary shoppers made purchases at the three retail locations and subsequently verified whether those transactions had been transmitted to the GRA’s Electronic VAT (E-VAT) platform. According to Wisdom Kofi Xetor, Head of the GRA’s Revenue Protection Unit, the checks revealed that several transactions were missing from the Authority’s records.

“We made purchases and went through the transactions. After that, we verified whether the transactions had been captured on our system, and we discovered that some of them had not been reflected,” Xetor told reporters after the operation .

Xetor further indicated that the receipts issued at the outlets did not conform to the GRA’s approved invoicing standards, raising suspicions that sales proceeds were being intentionally diverted from the official monitoring system. “Even the invoices issued did not conform to our approved invoicing system,” he added .

The GRA has not disclosed the identities of the arrested officials, and the exact scale of the suspected revenue loss remains under investigation.

The Stakes: A New VAT Regime

The arrests come against the backdrop of Ghana’s newly implemented VAT framework. The E-VAT system is not a new tax but an electronic invoicing mechanism designed to provide real-time monitoring of taxable transactions. Under the reforms, VAT-registered businesses are required to issue receipts through GRA-approved software—installed free of charge—or integrate their existing point-of-sale systems with the Authority’s platform .

The system generates invoices embedded with security features, including QR codes, the Commissioner-General’s signature, and unique fiscal references, allowing customers and auditors to verify authenticity .

The legal consequences for breaching the system are substantial. Under Section 67 of Act 1151, a person convicted of knowingly evading tax faces a fine of not less than twice and not more than three times the amount of tax evaded, or imprisonment for a term between two and five years, or both . This marks a departure from the previous regime, which lacked a mandatory minimum sentence.

Broader Enforcement Push

The China Mall operation is part of a wider GRA strategy to clamp down on revenue leakages in the retail sector, particularly among large-volume traders. The Authority has been progressively onboarding taxpayers onto the E-VAT platform in phases, targeting high-risk and large taxpayers first .

Officials have indicated that the investigation into China Mall’s operations is ongoing and could expand to other branches. Xetor warned that the GRA would pursue prosecution if deliberate tax evasion is established, noting that those found culpable could face prison terms of up to five years .

The GRA has urged businesses to utilize the free E-VAT tools provided by the Authority to ensure compliance, emphasizing that the system is designed to reduce compliance costs while enhancing transparency. For China Mall, however, the immediate focus is on the unfolding legal process and the potential penalties that may follow.

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Background Note: The E-VAT system was rolled out in phases beginning in 2024, with the GRA aiming to onboard tens of thousands of taxpayers to improve VAT reporting accuracy and close loopholes that previously allowed businesses to underreport sales.