The Ghana Revenue Authority (GRA) has identified about 100 additional foreign digital service providers that are not charging Value Added Tax (VAT) and plans to bring them into its tax collection system.
The Commissioner-General of the GRA, Anthony Kwasi Sarpong, disclosed this on Joy FM’s Super Morning Show on Wednesday, 14 October, during a discussion on the 20% tax applicable to Netflix, Spotify and other cross-border digital services.
He said the providers would be brought into the system gradually as the Authority expands compliance.
“We have identified about a hundred new emerging ones who today are not charging the VAT,” he said.
Mr Sarpong explained that about 92 foreign companies currently remit VAT to the GRA. He said the new collection mechanism would not add another 20% to charges from providers whose prices already include the tax.
“Nothing will change in terms of pricing from 92 merchants or entities,” he stated.
However, bringing providers that are not currently charging VAT into the system would extend collection to their qualifying services.
According to Mr Sarpong, the obligation for foreign companies supplying services to consumers in Ghana to charge VAT has existed since 2013.
He said the latest intervention seeks to improve collection and give the Authority a complete view of transactions involving those companies.
Under the existing arrangement, service providers collect payments, report their transactions and subsequently remit the tax component to the GRA.
Mr Sarpong said this leaves the Authority dependent on the companies’ declarations, with limited means of independently verifying the number and value of transactions.
The new system would separate the tax component at the point of payment, transfer it to the government and remit the remainder to the service provider.
“We are using technology to smartly account for and collect the component that belongs to the government of Ghana,” he said.
The intervention forms part of the GRA’s Real-Time VAT framework for qualifying cross-border digital services.
In an earlier report, Elsie Appau-Klu, Technical Advisor to the Commissioner-General, said the framework collects existing VAT at the point of payment through participating financial institutions. The combined 20% charge comprises 15% VAT, a 2.5% National Health Insurance Levy and a 2.5% GETFund Levy.
Mr Sarpong clarified that the collection system would cover qualifying payments made through mobile and other digital payment platforms, as well as bank cards.
“So it’s not only for a card,” he said.
He also stressed that the initial rollout applies to services, rather than physical goods bought from foreign online platforms.
He explained that imported goods are already assessed for applicable duties and VAT when they enter Ghana through its borders.
“So it is not going to affect goods or products, tangible products at the moment,” he stated.