Cocoa Buying Companies sue GRA and COCOBOD over VAT

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The Licensed Cocoa Buyers Association of Ghana (LICOBAG) and licensed cocoa buying companies (LBCs) have gone to court to challenge the cancellation of Value Added Tax (VAT) exemption for LBCs by the Ghana Revenue Authority (GRA).

In a writ filed at the commercial division of the Accra High Court Monday by their lawyer, Charles Tettey, the LBCs averred that since the promulgation of the VAT Act in 1998, the LBCs had always been exempted from VAT because their activities were essential to the supply of raw cocoa.

It is their contention that their activities formed part of the supply of cocoa, which can be termed as an agriculture product in its raw state and therefore, must be exempted from VAT per Section 3 of the First Schedule of the VAT Act, 1998 (ACT 546).


According to the plaintiffs, the cancellation of the VAT exemptions by the GRA in 2019 was in “bad faith, unreasonable, capricious and a complete disregard for the law and the economic rights of the plaintiffs.”

The LBCs who have joined their association to file the suit include Kuapa Kooko Company Limited, Federated Commodities Company Limited, Sika Aba Buyers Limited, CDH Commodities Limited, Adikanfo Commodities Limited, Olam Ghana Limited and Unicom Commodities Ghana Limited.

Joined to the suit as defendants are the GRA, the Ghana Cocoa Board (COCOBOD), the Commissioner-General of the GRA and the Chief Executive Officer of COCOBOD.

Case of Plaintiffs

In their statement of claim the plaintiffs contend that if the GRA had decided to cancel the VAT exemption, the liability to pay the VAT should be on COCOBOD and not the LBCs because the LBCs are mainly agents of COCOBOD, which are assisting it to carry out its duties.

“The third defendant (COCOBOD), being the principal of the plaintiff is under the circumstances, the competent party to be held liable for the payment of VAT,” the statement of claim averred.

Also, it is the contention of the plaintiffs that the decision of the GRA to subject them to VAT payments from 2014 will lead to the total collapse of their businesses.

“The plaintiffs aver that the conduct of the defendants is causing unbearable and unjustifiable economic stress to them (plaintiffs and other LBCs) and could cripple the activities of their business altogether if left unchecked by the court,” the statement of claim added.


The LBCs are seeking a declaration from the court that their activities form part of the supply of agricultural products in its raw state and therefore, must be exempted from tax.

They also want a declaration that the cancellation of the VAT exemption is “arbitrary, inequitable, unreasonable, unfair, capricious, in bad faith and therefore, unlawful, null and of no effect”.

The plaintiffs are further seeking an order of perpetual injunction restraining the GRA or its officers from assessing them for the purpose of charging them to pay VAT.

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