The Ghana Revenue Authority has moved to address growing public concerns over the introduction of a system for collecting Value Added Tax on digital services, insisting that the measure does not introduce a new tax or increase the existing rate.
Commissioner General Anthony Akwasi Sarpong said the initiative is designed to improve the collection of VAT already required by law on digital services supplied to Ghanaian consumers by companies operating outside the country.
He acknowledged concerns that subscriptions for streaming platforms, cloud storage, online gaming and other internet based services could become more expensive, particularly as households and businesses continue to manage their spending carefully. However, he maintained that the reform changes the method of collection rather than the applicable tax rate.
According to him, VAT on digital services supplied by foreign companies has formed part of Ghana’s tax framework since 2022, following amendments to the Value Added Tax Act, 2013 (Act 870), through the Value Added Tax (Amendment) Act, 2022 (Act 1082).
The GRA has been collecting the tax since the legislation came into force, with the combined effective rate currently standing at 20 per cent. This comprises 15 per cent VAT, alongside the 2.5 per cent National Health Insurance Levy and the 2.5 per cent GETFund Levy.
Mr Sarpong explained that the rate was reduced from 21.9 per cent to 20 per cent in January 2026 following the enactment of the Value Added Tax Act, 2025 (Act 1151). He therefore rejected suggestions that the latest collection arrangement amounts to an additional tax burden on consumers.
The principal change, he explained, concerns the point at which the tax is collected and transferred to the state.
Previously, the authority depended largely on foreign digital service providers to declare their sales to Ghanaian customers and remit the corresponding VAT. Although approximately 92 foreign companies have registered and are complying with the requirements, about 100 additional businesses have reportedly been identified as supplying services to Ghanaian customers without charging or remitting the tax required under existing legislation.
Mr Sarpong said relying exclusively on voluntary declarations presents enforcement difficulties, particularly when the businesses involved have no physical presence in Ghana.
To address these challenges, Parliament approved the implementation of a new collection arrangement by the GRA in July 2026, beginning with digital services supplied by businesses operating across national borders.
Under the system, which operates through the GRA’s Sentinal platform, VAT will be collected when customers make payments for qualifying services. Banks, mobile money operators and other licensed payment service providers handling the transactions will collect the applicable tax and transfer it to the authority. The institutions concerned are required to connect to the GRA system.
For consumers, the commissioner general said the process would require no additional registration, paperwork or action. Customers will continue purchasing their subscriptions and accessing their preferred digital services as usual, while receiving SMS or email notifications detailing their transactions and the VAT charged.
He nevertheless acknowledged that consumers could notice changes in how prices are displayed and how tax deductions appear during payment.
Under the revised arrangement, registered digital service providers will display prices exclusive of VAT, with the applicable tax itemised at checkout. Consequently, a subscription may appear cheaper in its advertised price before the tax is added at the payment stage.
Mr Sarpong stressed that this presentation should not be mistaken for a fresh 20 per cent charge imposed on top of a price that already includes VAT. Rather, the tax previously incorporated into the price will be displayed separately, allowing consumers to see the amount being collected.
Customers using services from providers that have not previously charged VAT may, however, encounter the deduction for the first time. The commissioner general conceded that this could affect the final amount paid by some consumers, but maintained that the development represents the enforcement of an existing legal obligation rather than the introduction of a new tax.
He further assured the public that consumers who have already paid VAT should not be charged twice. Where duplicate or erroneous charges occur, the system is expected to provide automatic refunds. Customers who do not receive refunds should contact the bank or mobile money provider through which the transaction was completed and retain their SMS or email notifications as evidence.
If the matter remains unresolved, they may seek assistance through the GRA’s official communication channels.
The authority has also clarified that the system will apply only to transactions meeting three conditions simultaneously. The payment must be made through a Ghana issued debit or credit card, mobile money account or digital wallet; the business supplying the service must be based outside Ghana; and the service must be delivered digitally over the internet.
Services such as online streaming, cloud computing and internet gaming fall within the intended scope of the arrangement.
Ordinary mobile money transfers to relatives and friends are excluded because they do not constitute payments for digital services supplied by foreign businesses. Physical goods purchased from abroad will also remain subject to the applicable customs procedures rather than this particular collection arrangement.
Explaining the rationale behind the reform, Mr Sarpong said it was intended to promote fairness between local and foreign businesses competing in Ghana’s digital marketplace.
He argued that Ghanaian software developers, streaming companies and digital advertising agencies are required to charge VAT on their services, whereas foreign businesses providing comparable services to the same customers should not enjoy a competitive advantage by failing to comply with the same tax requirements.
According to him, applying consistent rules to businesses operating within the same market is necessary to protect domestic enterprises and ensure that tax obligations are determined by the nature of the transaction rather than the location of the supplier.
He also pointed to the potential benefits for government revenue, citing remarks by the Minister for Finance to Parliament that Ghana loses an estimated 60 per cent of its potential VAT revenue through non compliance.
Mr Sarpong said sustainable revenue mobilisation should depend increasingly on improved compliance and more effective tax administration rather than repeated increases in tax rates.
Collecting VAT from foreign digital service providers at the point of payment, he explained, would help close existing compliance gaps by ensuring that businesses already legally required to pay the tax meet their obligations.
He maintained that recovering revenue already due to the state could reduce pressure to introduce additional taxes or resort to further borrowing to finance public expenditure.
The commissioner general also clarified that the new collection mechanism does not eliminate the statutory responsibilities of registered digital service providers. Such businesses must continue filing their periodic VAT returns, which account for the tax collected and remitted through the system without creating a second tax liability.
The initiative forms part of a broader programme to modernise Ghana’s tax administration. Other measures include the Integrated Tax Administration System, the Publican AI Trade Solution deployed at the country’s ports and the Fiscal Electronic Device currently undergoing a pilot phase.
Mr Sarpong said the overarching objective was to ensure that taxes imposed under existing laws are collected accurately, promptly and transparently, while maintaining consistent treatment for taxpayers and businesses.
He emphasised that public confidence in the tax system depends on clear communication about the obligations consumers face and the reasons behind government policies.
Reiterating the authority’s position, he said the digital VAT collection arrangement neither introduces a new tax nor increases the existing rate. Instead, it changes when and how the established tax is collected to improve compliance among local and foreign providers.
Ghanaians seeking further clarification have been encouraged to contact the Ghana Revenue Authority through its official telephone numbers, 020 926 7047 or 055 299 0000, by email at info@gra.gov.gh, through its website at www.gra.gov.gh, or by contacting their respective banks and mobile money service providers.
By Anthony Akwasi Sarpong, Commissioner General, Ghana Revenue Authority.
