Digital VAT collection system will not add another 20% to existing charges – GRA clarifies

The Ghana Revenue Authority (GRA) has clarified that the new digital VAT collection system for digital services will not result in an additional 20% charge for consumers. During a discussion on Joy FM’s Super Morning Show, Commissioner-General Anthony Kwasi Sarpong explained that the system will not impose an extra tax on top of existing charges. Instead, it will change how existing taxes are collected and recorded.

Mr Sarpong stated that the GRA currently receives VAT from about 92 foreign service providers whose customers will not experience price increases due to the change in collection. These existing providers will not see any change in pricing because the tax has already been included in their charges.

The reform aims to improve the GRA's ability to independently verify transactions by relying on foreign providers to report and remit the collected taxes. However, the Authority is also bringing 100 additional providers into the collection system gradually.

The new Real-Time VAT framework, introduced earlier, collects existing VAT at the point of payment through participating financial institutions. This includes services like streaming subscriptions, cloud computing, online gaming, and digital advertising. The 20% charge comprises 15% VAT, 2.5% National Health Insurance Levy, and 2.5% GETFund Levy.

The clarification covers not only bank card payments but also mobile payments and other digital payment platforms. The initial rollout will focus on services rather than physical goods, as imported goods already undergo tax assessment at Ghana's borders.