Ghana’s 20% VAT on digital subscription services has been part of the country’s tax framework since 2022, and the Ghana Revenue Authority (GRA) is only changing how it collects the money, tax lawyer Jonathan Alua says.
Mr Alua told TV3’s News Central on Wednesday, October 14, 2026, that the GRA now plans to use resident payment service providers to withhold the VAT on behalf of the state.
“The VAT component of these services has been in the books since 2022, which a lot of Ghanaians haven’t paid attention to,” he said. “What is changing now is the mode of collection. The GRA feels it’s more effective to use resident payment service providers to withhold the amount supposed to go to the GRA.”
The Ghana Revenue Authority introduced its E-VAT portal in 2022, allowing foreign digital service providers to register. The expectation was that the system would generate significant revenue, but Mr Alua said enforcing compliance with overseas companies had proved difficult.
“The challenge is these companies are not resident, and for compliance purposes, it’s usually harder to deal with them,” he said.
He also said VAT should apply equally to services supplied by domestic and foreign businesses.
“As far as VAT is concerned, there shouldn’t be a distinction between domestic and foreign services. It’s very proper,” Mr Alua said.
While welcoming the GRA’s approach, he warned that the system must prevent customers from being charged VAT twice.
“I’m glad GRA is taking this step, but my only concern is to watch out so that we are not double taxing,” he said.
Mr Alua called for a system capable of identifying whether VAT had already been included in the transaction when a customer pays a service provider.
“There should be a properly deployed system that should be able to tell at the level of interfacing between service provider and patron to know that you are paying,” he said.
He said a particular risk arose when a digital provider did not show VAT separately on its invoice, leaving the bank or payment service provider to determine whether the tax had already been charged.
“What is slightly dangerous is where the service providers do not invoice you the VAT, and it is the bank and payment service provider’s responsibility to determine whether VAT has been invoiced because it won’t be clear on the face of the invoice,” he added.
GRA says online transactions need greater oversight
GRA Commissioner General Anthony Kwasi Sarpong said in an interview with Joy FM on Wednesday, October 14, that VAT is a consumption tax paid when goods and services are used.
“The VAT is known as consumption tax and as we consume we pay the taxes,” he said, pointing to the growth of online shopping among Ghanaians.
Mr Sarpong said legislation passed in 2013 already required foreign entities supplying services to Ghanaian consumers to charge VAT, just as Ghanaian businesses do.
He said those companies had been charging the tax, meaning the current move did not create a new levy.
However, he acknowledged that the GRA could not see the full volume of transactions involving the companies. The Authority is therefore introducing a system designed to provide a complete view of dealings between it and the foreign entities.
The aim is to ensure VAT on online purchases is properly recorded and accounted for, rather than impose a new tax burden on consumers.
