The Ghana Revenue Authority (GRA) has clarified that its new digital Value Added Tax (VAT) collection system will not introduce new taxes or increase existing rates, but will improve the collection of taxes already applicable to digital services.
The clarification follows public concerns that the system would impose an additional 20% tax on subscriptions and payments for services such as Netflix, Google and Amazon.
In a statement dated October 14, the GRA said the effective tax rate remains 20%, comprising 15% VAT, 2.5% National Health Insurance Levy (NHIL) and 2.5% Ghana Education Trust Fund (GETFund) Levy.
“The new system does not introduce a new tax or increase the existing VAT rate,” the authority said, adding that the change was intended to improve the collection and accounting of taxes already due to the state.
The GRA said about 92 foreign digital service providers are already registered and remitting VAT, while another 100 have been identified for inclusion in the tax system.
Consumers who already pay the applicable taxes through their subscriptions should not face additional charges on the same transactions, it said. However, users of services whose providers are not currently charging and remitting the taxes may see the statutory charges reflected in their payments as those providers are brought into compliance.
The new system will allow the tax component of qualifying transactions to be identified and collected at the point of payment through participating banks, payment service providers and other financial institutions.
Under the existing arrangement, the GRA relies largely on foreign digital service providers to declare their transactions and remit the taxes due. The authority said the new mechanism would improve compliance, strengthen accountability and ensure that revenue owed to the state is properly collected.
The system covers electronically supplied services, including streaming subscriptions, cloud computing, online gaming and digital advertising paid for through Ghana-issued payment instruments such as bank cards and mobile money. Physical goods bought from international e-commerce platforms remain subject to applicable customs procedures.
The GRA said it would continue engaging banks, payment providers and digital service companies to prevent duplicate collection and ensure consumers receive clear information about applicable charges.
“The introduction of a new tax must not be confused with improvements in the collection of an existing tax,” the authority said.
It urged consumers who encounter charges that appear inconsistent with the clarification to contact the GRA through its official channels for assistance.
