RICHARD AMO-HENE VRS GHANA REVENUE AUTHORITY, ATTORNEY-GENERAL & JUDICIAL SERVICE

Background:

Section 42(5)(b) of the Revenue Administration Act, 2016 (Act 915) provides the procedures for objecting to a decision/assessment by the Commissioner-General. The said sections provides that, “an objection against a tax decision shall not be entertained by the Commissioner-General unless the person has: a. In the case of import duties and taxes, paid all outstanding taxes including the full amount of the tax in dispute; and b. In the case of other taxes, paid outstanding taxes including 30% of the tax in dispute “ Order 54 rule 4(1) of the High Court (Civil Procedure) Rules, 2004 (C.I 47) provides that …..the High Court will not entertain an appeal against a tax assessment unless the aggrieved person has paid 25% of the disputed tax in the first quarter of that year of assessment as contained in the notice of assessment. Richard Amo-Hene sought prayed to the Supreme Court for a declaration that the requirements to pay 25% or 30% before one’s appear would be entertained is unconstitutional, nulity, void and unenforceable. To him, Section 42(5)(b) of Act 915 and Order 54 rule 4(1) of C.I 47 were unconstitutional as this provisions are inconsistent with articles 2(1), 17(1), 19(2)(c), 33(1) & (5), 125(2), 130(1), 132, 133(1) and 140 of the Constitution of Ghana, 1992 (the 1992 Constitution). THese provisions of Act 915 and Order 54 Rule 4*1( of C.I 47 flaws the guarantee of presumption of innocence and a person’s right of access to the court.

Grounds (if its appeal case):

Whether or not the plaintiff has properly invoked the original jurisdiction of the Supreme Court. 2. Whether or not Section 42(5)(b) of the Revenue Administration Act, 2016 which requires a taxpayer to pay all outstanding taxes including 30% of the tax in dispute before an objection to a tax decision can be entertained by the Commissioner-General of the GRA is inconsistent with the spirit and letter of articles 2(1), 17(1), 125(2), 19(2)(c), 33(1), 132, 133(1), 140 of the 1992 Constitution and to the extent of the inconsistency void. 3. Whether or not Order 54 rule 4(1) of the High Court (Civil Procedure) Rules 2004 C.I 47 which requires a taxpayer to pay an amount not less than 25% of the amount payable in the first quarter of that year of assessment as contained in the notice of assessment before an appeal can be entertained by the High Court is inconsistent with the spirit and letter of articles 2(1), 17(1), 125(2), 19(2)(c), 33(1), 132, 133(1), 140 of the 1992 Constitution and impedes a person’s right of access to court, participation in the administration of justice and the presumption of innocence until proven or pleaded guilty and to the extent of the inconsistency void.

Areas of Tax:

  • Tax Administration
  • Tax Litigation
  • Tax Compliance

Tax Payer Argument:

Amo-Hene argued that the requirement on taxpayer to pay thirty per cent (30%) of the disputed tax per Act 915 (as amended), or twenty-five per cent (25%) payment in line with the procedural rules in CI 47, already concludes culpability on that taxpayer before the determination of the tax in dispute. His argument is that the “presumption” of innocence expressly for by the 1992 Constitution of Ghana which says that a person is presumed innocent until his guilt is proved beyond reasonable doubt. Thus, by paying the 30% or 25% before your case is entertained rather presumes that the taxpayer is guilty. To further his argument, he advanced on the scope of right of access to the Court; To him, access to the Court was established for a fair and proper administration of justice; that per Article 35(3) of the 1992 Constitution, under the Directive Principles of State Policy, citizens are entitled to access public facilities and services, which can be read to include the courts, without any undue fetter or impediment. Thus, where section 42(5)(b) of the Act 915 (as amended) and Order 54 rule 4(1) of CI 47 imposes this condition before a tax objection or tax appeal can be heard, it is undue restriction on the person’s right to access the courts and participation in the administration of justice despite such clear constitutional provisions.

GRA Argurment:

    The crust of the defendant’s first argument is that, the powers of the Supreme Court has not been properly invoked since the case is a human right issue and should have been raised at the High Court which is properly clothes to adjudicate on Human right matters than the Supreme Court. 2.       The defendants argued that the requirement of the deposit balance between the taxpayer’s rights as against the need for the effective settlement of tax debts. This argument is on policy grounds to the effect that the “pay now and argue later” requirement addresses recalcitrant taxpayers strategically seeking to use the objection and appeal procedure to defer payment of their taxes. 3.       The provisions in Section 42(5)(b) of Act 915 (as amended), and Order 54 rule 4(1) of C.I 47 seeks to secure Government revenue to run the machinery of the state while the dispute relating to the tax issue is resolved.

Ruling:

The Supreme Court in sum ruled that the requirement to pay 30% 0or 25%% of tax liability and in the case of indiract tax. payment of the outsatnding taxes before one’s objection is heard is constitutional and not inconsistent with the constitution of the Republic of Ghana. Section 42(5) of the Revenue Administration Act, 2016 (Act 915) and Order 54 rule 4(1) of the High Court (Civil Procedure) Rules 2004 (C.I 47) are therefore not inconsistent with or in contravention to constitutional provisions. The case was therefore dismissed.

Reasons/Direcction/Judges comments:

Section 42(5) of Act 915 does not give an undue fetter to the hearing of an objection by a citizen to any tax decision due to the act the dispute resolution provisions under Act 915, and “upon a true and proper interpretation of Article 23 of the 1992 Constitution, section 42(5) of Act 915 is not inconsistent with and violative of the constitutional right to administrative justice guaranteed under the provisions of Article 23 of the 1992 Constitution”. 2. Supreme Court also reasoned that “to the extent that any tax decision taken by the Commissioner-General is an administrative decision, and tax decisions are by Act 915 made subject to objection, judicial review, and appeal, the regime provided under Act 915 for regulation of tax decision by the Commissioner-General passes the test of constitutionality.”

Law References:

Export Finance Company Limited v Ghana Revenue Authority and Anor, Writ No. J1/7/2021 dated 30th November, 2022 SC section 42(5) of Act 915 Section 42(5)(b) of the Revenue Administration Act, 2016 (Act 915 with articles 2(1), 17(1), 19(2)(c), 33(1) & (5), 125(2), 130(1), 132, 133(1) and 140 of the Constitution of Ghana, 1992 Order 54 rule 4(1) of the High Court (Civil Procedure) Rules, 2004 (C.I 47) Kwasi Afrifa v Ghana Revenue Authority & Anor., Writ No. J1/23/2021 dated 30th November, 2022, SC

Commentary:

Witthout further challenge to these provisions, it is established/confirmed as constitutional. The requiredment of “Pay now and argue later”. Thus the 30% or 25% or the total liability in case of infiract taxes. This ruling does not quash the Commissioner’s powers to waive or vary the requirement to make the deposit. where one has a challenge in meeting the requirement of the deposit, an application for a waiver or variation can be made to the Commissioner-General. Please note that the Commissioner-General is not mandated to grant the application. One can proceed to the court for Judicial review where the one belief’s that the application to variation, extension or waiver has been unfairly rejected by the Commissioner