A proposed levy structure under Ghana’s National Information Technology Agency, or NITA continues to draw criticism from digital entrepreneurs and startup advocates, who argue that the bill is not fit for purpose, saying it could kill Ghana’s tech dreams. Others argue that charging businesses based on gross revenue rather than profit could undermine the country’s growing technology sector.
Jay Kwashie, software engineering consultant and a digital creator, said the approach outlined under Section 23(h) of the regulatory framework administered by the NITA, imposes an unusually aggressive burden on technology firms, particularly startups and software-as-a-service companies operating on thin margins.
“Gross revenue is the most aggressive base a regulator can possibly pick, because it ignores operating costs, salaries, infrastructure, debt, and whether the business made any profit at all,” Kwashie said in a post.
It is however important to note that while it is true that levies and taxes are usually not slapped on gross revenue, in Ghana’s mining sector the growth and sustainability levy and royalties on gold are charged on gross production.
Kwashie argued that a software company generating GH₵2 million in annual revenue with a 5% profit margin would earn GH₵100,000 in profit, while a 1% levy on gross revenue would amount to GH₵20,000, or 20% of actual earnings. For businesses operating on margins closer to 2%, the levy could exceed total profit, he said.
The criticism comes as the government pushes to expand Ghana’s digital economy through initiatives such as coding programs, startup support schemes and broader digitalization efforts under the administration of President John Dramani Mahama.
Kwashie compared the proposed framework to hypothetical levies on transport operators and farmers based on total receipts rather than earnings after costs.
“Imagine the Ministry of Transport telling every trotro and taxi driver to surrender 1% of their total fares, before fuel, before maintenance,” he said. “We would call it madness.”
He also questioned why NITA, a regulatory agency rather than a tax authority, would impose a charge based on gross revenue when the Ghana Revenue Authority taxes businesses on profit.
“A regulator is now greedier than the taxman,” he said, calling the measure a “revenue grab.”
The comments were directed at Communications Minister Samuel Nartey George and NITA Director-General Kevor Mark-Oliver, whom he urged to justify the rationale behind the levy.
The conversation continues with an expected X space on Tuesday to be hosted by NITA amid the growing tensions between regulators seeking to formalize oversight of the technology industry and digital entrepreneurs who warn that additional compliance costs could discourage innovation and investment in one of Ghana’s fastest-growing sectors.
