NO DOUBLE TAXATION UNDER NEW DIGITAL TAX COLLECTION SYSTEM – GRA ASSURES

The assurance comes as participating banks and payment service providers are expected to begin collecting and remitting applicable taxes on qualifying digital transactions made with Ghana-issued bank cards. The GRA says customers who already pay the applicable taxes through subscription prices should not be charged again on the same transaction when the new collection mechanism takes effect. “The Authority wishes to clarify that the new system does not introduce a new tax or increase the existing VAT rate. Rather, it is intended to improve the collection and accounting of taxes already applicable to digital services supplied by non-resident companies to consumers in Ghana”, a statement from the GRA read. GRA identifies 100 foreign digital providers Approximately 92 non-resident digital service providers are currently registered and remitting VAT to the GRA. The Authority has also identified about 100 additional providers that are not currently charging and remitting the applicable taxes. These providers will be progressively brought into compliance. Consumers using services from providers that were previously not charging the applicable taxes may therefore see the statutory amounts reflected in their payments. “The GRA recognises the importance of ensuring that consumers are adequately informed about applicable taxes and are not subjected to duplicate taxation. The Authority will therefore continue to engage banks, payment service providers and digital service providers to ensure appropriate safeguards against duplicate collection and clear communication of applicable charges.” Existing tax rates remain unchanged The effective tax rate remains 20%, comprising 15% Value Added Tax (VAT), a 2.5% National Health Insurance Levy (NHIL) and a 2.5% Ghana Education Trust Fund (GETFund) Levy. The GRA said the new system would improve the collection and accounting of these taxes without increasing the existing rates. The arrangement is expected to affect payments for a range of foreign digital services, including streaming platforms such as Netflix, Spotify, Disney+, Showmax and beIN Sports. Other services potentially covered include Microsoft 365, Adobe, Zoom, Google Workspace and ChatGPT, as well as cloud computing platforms such as Amazon Web Services (AWS), Google Cloud and DigitalOcean. Qualifying payments for online advertising on Google, Meta, TikTok and LinkedIn, alongside digital learning, cybersecurity, VPN services and online travel bookings, may also fall within the scope of the system. Some banks have already notified customers that applicable taxes will be reflected in payments for qualifying services made with their cards. Credit: citinewsroom.com