20% Digital subscription tax not new; GRA only changing collection mode - Tax lawyer

A tax lawyer, Jonathan Alua, has clarified that the VAT component on digital subscription services being introduced by the Ghana Revenue Authority (GRA) is not new.

He asserts it has been in Ghana's tax books since 2022, and that the current controversy is not about a new tax but a change in how it is collected.

Speaking on TV3's News Central on Wednesday, October 14, 2026, Mr. Alua explained that the GRA is now leveraging resident payment service providers to withhold the VAT component on behalf of the State a shift in collection strategy rather than the introduction of a fresh levy.

"The VAT component of these services has been in the books since 2022, which a lot of Ghanaians haven't paid attention to," Mr. Alua said. "What is changing now is the mode of collection. The GRA feels it's more effective to use resident payment service providers to withhold the amount supposed to go to the GRA."

He noted that when the E-VAT portal was introduced in 2022 for foreign digital service providers to register, the expectation was that government would raise significant revenue from the sector. However, compliance has been harder to deal with them.

"The challenge is these companies are not resident, and for compliance purposes, it's usually harder to deal with them," Mr. Alua explained.

On the principle behind the tax, the lawyer was clear: "As far as VAT is concerned, there shouldn't be a distinction between domestic and foreign services. It's very proper."

He welcomed the GRA's move but cautioned against unintended consequences."I'm glad GRA is taking this step, but my only concern is to watch out so that we are not double taxing," he warned.

He stressed the need for a properly deployed system that can detect, at the point of interface between service provider and patron, whether VAT has already been invoiced.

"There should be a properly deployed system that should be able to tell at the level of interfacing between service provider and patron to know that you are paying," he said.

He identified a critical gap in the current arrangement: "What is slightly dangerous is where the service providers do not invoice you the VAT, and it is the bank and payment service provider's responsibility to determine whether VAT has been invoiced because it won't be clear on the face of the invoice."

Meanwhile, the Commissioner General of the Ghana Revenue Authority (GRA), Anthony Kwasi Sarpong, had mentioned at an interview on Joy FM today, Wednesday, October 14, that VAT is a consumption tax, payable as goods and services are consumed.

"The VAT is known as consumption tax and as we consume we pay the taxes," he said, noting that technology is changing consumer trends as more Ghanaians shop online.

He explained that a 2013 legislation already requires foreign entities providing services to Ghanaian consumers to charge VAT, just as local entities do.

"In 2013 in Ghana, a law was passed which required that if an entity is not operating in Ghana and provides services to Ghanaian consumers, they must place VAT on those services," Sarpong stated, adding that these entities have been charging the tax over the years, so it is not a new imposition.

However, the GRA boss acknowledged that the Authority lacks complete visibility over these transactions. "From GRA's point of view, we don't have complete visibility of the total transactions," he admitted.

To close the gap, the GRA is introducing a system to give it a full view of transactions between the Authority and these entities. "We are intervening with a system that will allow us to have a complete full view of the transaction between GRA and these entities," he added.

The move aims to ensure VAT on online purchases is properly accounted for, rather than introducing any fresh tax burden on consumers.