GRA says digital VAT collection will not add another 20% to already-taxed subscriptions

Ghana’s revised collection mechanism for qualifying foreign digital services does not impose an additional 20% on subscriptions that already include the applicable taxes, according to the Ghana Revenue Authority’s clarification reported on 14 October.

The mechanism, introduced on 15 October, involves participating banks and payment providers collecting the tax component of eligible payments. It is a change in collection, rather than a separate levy.

What customers should check

The combined 20% comprises 15% VAT and two 2.5% levies. Services already accounting for these taxes should not attract a duplicate charge. Where a provider has not included the taxes, bringing it into the system could increase the customer’s bill.

Streaming, software and other qualifying overseas digital services may be affected. This does not mean every mobile-money transfer is subject to the arrangement. Customers should compare invoices and ask their provider or bank to explain an unexpected deduction.

The GRA’s clarification concerns how the system is intended to operate; it is not independent confirmation that every payment has been processed correctly.

Sources

Pulse Ghana: GRA clarification, 14 October; Graphic Online: collection explainer; GRA: VAT framework.

Image credit

Illustrative smartphone photograph by Omkar Patyane / StockSnap, CC0 1.0. Date and location unspecified. Cropped and resized; not a Ghanaian tax transaction.