Commissioner-General of the GRA, Anthony Kwasi Sarpong
Carbonatix Pre-Player Loader

Audio By Carbonatix

The Commissioner-General of the Ghana Revenue Authority (GRA), Anthony Kwasi Sarpong, says the digital Value Added Tax (VAT) collection system will cover qualifying payments made through mobile and other digital payment platforms, beyond transactions involving bank cards.

Speaking on Joy FM’s Super Morning Show on Wednesday, 14th October, he explained that the collection mechanism would capture payments for qualifying foreign digital services routed through the banking and other digital payment systems.

His clarification came during a discussion on the 20% tax applicable to services such as Netflix, Spotify and other online subscription platforms.

“So it’s not only for a card. Assuming you are also using your mobile to pay, that will also be captured,” he said.

Mr Sarpong was responding to a question about whether consumers who pay through standing orders or direct debits, rather than bank cards, would still fall within the collection system.

He explained that the system would separate the tax component from the provider’s share when a qualifying payment is processed.

“So any other digital payment platform you are using, at the point of payment, the system will split the value into two,” he stated.

The tax component would be transferred to a government account, while the remaining amount would go to the merchant or service provider.

Mr Sarpong said the arrangement would improve the GRA’s ability to track transactions and collect taxes that foreign providers currently remit themselves.

Using Netflix as an example, he explained that the Authority presently relies on the company to declare the number of transactions and the corresponding VAT due.

The new system, he said, would give the GRA an independent record of the number and value of payments, alongside the applicable tax.

He stressed that the change in collection would not impose an additional 20% on subscriptions whose prices already include the tax.

“So 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 him, about 92 foreign companies currently remit VAT to the Authority, and the collection reform would not change their pricing.

However, the GRA has identified about 100 additional providers that are not charging VAT and intends to bring them into the system gradually.

READ ALSO: Banks to charge 20% VAT on payments for Netflix, Zoom, TikTok and others

The Real-Time VAT framework covers electronically supplied services from non-resident providers paid for through Ghana-issued payment instruments, including cards, mobile money accounts and digital wallets. In an earlier explanation, the Commissioner-General’s Technical Advisor, Elsie Appau-Klu, said participating financial institutions would collect and remit the tax at the point of payment.

The effective 20% charge comprises 15% VAT, a 2.5% National Health Insurance Levy and a 2.5% GETFund Levy. Services covered include streaming subscriptions, cloud computing, online gaming and digital advertising.

Mr Sarpong also clarified that the initial rollout applies to services rather than physical goods purchased from foreign online platforms.

He said imported goods already attract applicable duties and VAT when they enter Ghana through its borders.

“So it is not going to affect goods or products, tangible products at the moment,” he stated.

DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.
DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.