AFRIFA V. GHANA REVENUE AUTHORITY (GRA)

Citation: Unreported Judgment of the Supreme Court (Civil Appeal No. J6/02/2022) dated 30 November 2022.

Digital Citation: [2022] GHASC 99

Brief Facts:
This was a tax dispute on appeal to the Supreme Court for interpretation of the constitutionality or otherwise of section 42 (5) of the Revenue Administration Act, 2016 (Act 915).
The appellant, Kwasi Afrifa, a lawyer, challenged the constitutionality of section 42(5) as was applied by the Ghana Revenue Authority (the respondent). Afrifa had been denied the issuance of a tax clearance certificate, which was subject to the submission of specific documents. He had earlier objected to a tax assessment from 2012-2016, but had to settle the same inclusive of a 30% penalty before the disputed tax objection could be entertained.
The appellant claimed that this requirement of the settlement of assessed tax plus penalty before determination of an appeal, violated the fundamental human rights of tax payers under Article 33, and impugned administrative justice requirements under Article 23 of the 1992 Constitution.
The appellant claimed that this requirement of the settlement of assessed tax plus penalty before determination of an appeal, violated the fundamental human rights of taxpayers under Article 33, and impugned administrative justice requirements under Article 23 of the 1992 Constitution.

Grounds of Appeal:
The constitutional question for interpretation was for the Supreme Court to declare section 42(5) of Act 915 as inconsistent with and violative of the right to administrative justice under Article 23 of the 1992 Constitution.

Issues

  • Whether or not section 42(5) of Act 915 imposes a fetter on access to administrative justice by requiring partial payment before hearing an objection to a tax decision?
  • Whether or not the procedural safeguards in Act 915 adequately balance the taxpayer’s rights and the public interest.

Areas of Tax Law Considered

  • Tax assessment and dispute resolution under Ghanaian tax laws, particularly objections to tax decisions.
  • Conditions for administrative appeals.

Arguments

Appellant (Taxpayer)

  1. Section 42(5) imposes a barrier to accessing administrative justice which violates Article 23.
  2. The requirement to pay 30% of the disputed tax assessed amounts to a denial of the right to be heard.
  3. The provision disproportionately affects taxpayers with limited resources, violating equality before the law.
  4. Alternative procedural safeguards are preferable to ensure fairness and compliance with constitutional rights.

Respondent (Ghana Revenue Authority)

  1. Tax payment is essential for state revenue, and requiring partial payment prevents frivolous objections.
  2. Section 42(5) is part of a broader dispute resolution framework, including discretion under section 42(6) to waive or vary payments.
  3. The law provides adequate procedural safeguards consistent with Article 23 and due process requirements under Article 296.
  4. The balancing of public interest and private rights justifies the conditional payment requirement.

Ruling
The Supreme Court held that section 42(5) of Act 915 does not violate Article 23 of the 1992 Constitution when read in conjunction with the discretionary powers provided under section 42(6) and related provisions. The law adequately balances the need for effective tax administration with taxpayers’ rights.

The appeal failed.

Reasoning of Court

  1. The fundamental rule in interpretation requires the document to be read as a whole. Section 42(5), read within the context of subsections (6), (7) and articles 23 and 296 of the Constitution do not have the effect of denial of access to the courts for redress against a tax decision by the Commissioner General.
  2. Section 42(6) of Act 915 allows the Commissioner-General to waive, vary, or suspend payment requirements, ensuring fairness.
  3. Article 296 sets out standards for exercising discretion, providing sufficient protection against arbitrary decisions.
  4. Access to courts or judicial review remains available under Act 915 for taxpayers dissatisfied with administrative decisions.
  5. The proportionality test supports the constitutionality of section 42(5), as it reasonably advances the public interest without unduly infringing individual rights.

Principles for Tax Practitioners
The case confirms section 42(5) of Act 915 as constitutional as tax laws must balance individual rights with public revenue needs. While this section 42 (5) imposes a conditional payment requirement for tax objections, the availability of discretionary relief under section 42(6) and broader procedural safeguards ensures compliance with the right to administrative justice. Judicial review remains a legal redress mechanism for potential abuses of discretion by tax authorities.

References:

Constitutional:

  • Articles 2, 12, 23 and 296 of the 1992 Constitution of Ghana:

Statutory references:

  • Sections 42(5), 42(6), 42(7) and 44 of the Revenue Administration Act, 2016 (Act 915)

Case Law

  • Amidu v. President Kuffuor & Others [2001-2002] SCGLR 86
  • Awuni v. WAEC [2003-2004] 1 SCGLR 471
  • Center for Juvenile Delinquency v. Ghana Revenue Authority [2019] GHASC 29
  • Metcash Trading Ltd v. Commissioner for South African Revenue Service [2001] 1 BCLR 1
  • Richard Amo-Hene v Ghana Revenue Authority & 2 Ors (Writ No J1/8/2021 unreported judgment of the Supreme Court) dated 30th November 2022