By Morkporkpor Anku, GNA
Accra, Oct. 14, GNA – The Ghana Revenue Authority (GRA) has clarified that its new digital Value Added Tax (VAT) collection system will not impose an additional 20 per cent tax on subscriptions and payments for digital services.
The system is designed to improve the collection and accounting of existing taxes on electronically supplied services by non-resident companies to consumers in Ghana.
Mr Eugene Ansu Kyeremeh, Communication Lead for the Real Time VAT Project, said at a media engagement that reports suggesting the system would introduce an additional tax were misleading.
He said no new tax was being introduced and that the existing effective tax rate of 20 per cent remained unchanged.
The rate comprises 15 per cent VAT, a 2.5 per cent National Health Insurance Levy (NHIL) and a 2.5 per cent Ghana Education Trust Fund (GETFund) Levy.
Mr Kyeremeh said VAT on electronically supplied services by non-resident providers was already a statutory obligation under Ghana’s tax laws.
He explained that about 92 non-resident digital service providers were registered and remitting VAT to the Authority.
Consumers whose subscription prices already included the applicable taxes should not face additional charges on the same transactions, he said.
The Authority, in a statement, said it had identified about 100 other non-resident digital service providers that were not charging and remitting the applicable taxes.
It said those providers would progressively be brought into compliance, meaning consumers using their services could see the statutory taxes reflected in their payments if they had not previously been charged.
The GRA said the new system would improve transparency and accountability by enabling the tax component of qualifying transactions to be identified and collected at the point of payment.
It said the system would operate through participating financial institutions and payment service providers, reducing reliance on foreign digital service providers to declare transactions and remit the taxes due.
The system would cover qualifying electronically supplied services, including streaming subscriptions, cloud computing, online gaming and digital advertising, paid for through Ghana-issued bank cards, mobile money and other digital payment platforms.
The Authority said the system applied to digital services and not imported physical goods, which would remain subject to the applicable Customs procedures.
The GRA said it would continue engaging banks, payment service providers and digital service providers to prevent duplicate taxation and ensure clear communication of applicable charges.
It urged consumers who encountered charges that appeared inconsistent with the clarification to contact the Authority through its official channels for assistance and redress.
GNA
Edited by Agnes Boye-Doe
Reporter: Morkporkpor Anku
Email: [email protected]