GRA identifies about 100 additional foreign digital service providers for VAT collection

The Ghana Revenue Authority (GRA) has identified approximately 100 foreign digital service providers that are currently not charging Value Added Tax (VAT). The GRA plans to incorporate these providers into its tax collection system. Commissioner-General Anthony Kwasi Sarpong made this announcement on Joy FM’s Super Morning Show, discussing the 20% tax applied to Netflix, Spotify, and similar cross-border digital services.

Currently, 92 foreign companies remit VAT to the GRA. The new system will bring the uncharged providers into compliance without increasing prices for the existing 92 merchants. The GRA has had a requirement since 2013 for foreign companies to charge VAT when supplying services to Ghanaian consumers. The new approach aims to enhance collection and provide a complete picture of transactions involving these companies.

The tax component will be separated at the point of payment and transferred to the government, with the remainder remitted to the service provider. This intervention is part of the GRA's Real-Time VAT framework for qualifying cross-border digital services, which collects existing VAT at the point of payment through financial institutions.

The combined 20% charge includes 15% VAT, a 2.5% National Health Insurance Levy, and a 2.5% GETFund Levy. The collection system will apply to payments made via mobile and other digital platforms, as well as bank cards.