The Member of Parliament for Tano North, Dr Gideon Boako, has questioned the fairness and economic implications of the government’s digital VAT collection policy, arguing that it could increase costs for Ghanaians who depend on foreign online services.
In a write-up on Friday, October 16, Dr Boako said the government’s insistence that the policy was not a new tax overlooked the fact that some consumers would now have to pay VAT on services for which they had not previously been charged the tax.
He explained that broadening the tax base to include more foreign digital service providers could affect subscriptions, online advertising, business software and educational platforms. He maintained that although the tax may already exist in legislation, its application to previously untaxed transactions creates an additional financial obligation for affected consumers.
“Taxpayers are concerned about the economic incidence on their purse/pocket and not the legal regimes of taxes,” he wrote.
Dr Boako also questioned the application of the 20% effective rate to both educational and entertainment services.
He argued that students accessing online courses from foreign providers could face a different tax burden from those using comparable services offered locally, while small businesses could incur higher costs when paying to promote their products on social media.
He further expressed concern about possible double taxation, asking how the GRA would prevent consumers from being charged twice and what procedures would be available to those seeking refunds.
He also questioned the policy’s implications for payments made through mobile money platforms, including MTN MoMo, Telecel Cash and AT Money.
The MP called on the government to address these concerns and explain how the policy would affect ordinary consumers and businesses, particularly young entrepreneurs who depend on digital tools to generate income.
The GRA has said the existing effective tax rate remains 20%, comprising 15% VAT, a 2.5% National Health Insurance Levy and a 2.5% GETFund Levy. It has also assured consumers that safeguards will be implemented to prevent duplicate taxation on transactions for which the applicable taxes have already been paid.