Ghana’s 20% digital tax explained: What changes on Oct 15 and how it affects you

The arrangement will affect qualifying services supplied by foreign companies and paid for through Ghana-issued payment methods.

The system is being implemented under the Value Added Tax Act, 2025 (Act 1151), which came into force on January 1, 2026. The applicable tax rate is 20%, made up of 15% VAT, a 2.5% National Health Insurance Levy (NHIL) and a 2.5% Ghana Education Trust Fund (GETFund) Levy.

The change is intended to improve the collection and monitoring of taxes on digital transactions, particularly those involving overseas businesses that provide services to customers in Ghana.

Netflix

Previously, the Ghana Revenue Authority (GRA) depended largely on foreign digital companies to declare their Ghanaian transactions and pay the relevant taxes. This approach made it more difficult for the Authority to independently establish whether all taxable transactions had been properly reported.

Under the new arrangement, participating banks and payment service providers will collect the relevant tax when customers pay for qualifying digital services. The tax component will then be transferred to the GRA, while the remaining payment goes to the service provider.

The system is designed to cover eligible transactions made through Ghana-issued bank cards, mobile money accounts and digital wallets.

Potentially affected services include streaming platforms such as Netflix, Spotify, Disney+ and Showmax; workplace software from Microsoft and Adobe; online meeting tools such as Zoom; artificial intelligence platforms such as ChatGPT; cloud services; online advertising; gaming; and certain digital education and business communication products.

ChatGPT

The application of the tax will depend on whether a transaction falls within the framework and whether the relevant taxes have already been accounted for.

For example, if a digital service costs GH¢1,000 before tax, the price would rise to GH¢1,200 if the 20% tax has not been included. However, customers who are already paying the tax as part of their subscription should not pay an extra 20%.

Physical products bought through international online marketplaces are not included in the initial rollout. Such goods are subject to the relevant import tax arrangements when they enter Ghana.

Explaining the approach, GRA Commissioner-General Anthony Kwasi Sarpong said the system would use technology to identify and collect the government’s share of qualifying payments.

“We are using technology to smartly account for and collect the component that belongs to the government of Ghana,” he said.

He also indicated that the initial arrangement would focus on digital services rather than tangible products.

“It is not going to affect goods or products, tangible products at the moment,” he said.

Commissioner-General of the Ghana Revenue Authority (GRA)

Ahead of the October 15 implementation date, the GRA has moved to clarify concerns that consumers could face a fresh 20% charge on top of their existing digital subscriptions.

Speaking on Joy FM on Wednesday, October 14, Mr Sarpong explained that the new mechanism would not duplicate taxes already included in customers’ payments.

“This system is not adding another 20 per cent to what you already pay. It is already embedded, and consumers are paying,” he said.

According to the Commissioner-General, around 92 foreign digital service providers are already remitting taxes to the GRA. Customers using these services are not expected to pay more simply because the collection process is changing.

“Nothing will change in terms of pricing from 92 merchants or entities,” he stated.

The Authority has, however, identified approximately 100 other providers that are not currently charging the applicable taxes. It intends to incorporate these businesses into the system in stages.

This means the impact on individual customers will depend on the tax status of the services they use. Where a provider has not been charging the required tax, the eventual application of the levy could increase the amount customers pay.

For businesses, the costs of foreign software, cloud computing, online advertising and other digital tools could also be affected if the relevant taxes have not previously been included.

The new framework is therefore primarily a change in how the GRA collects and monitors taxes on qualifying digital services, rather than the introduction of a separate 20% levy. Consumers should distinguish between services that already include the applicable taxes and those that may begin charging them as the system expands.