VAT on e-commerce: GRA, 2 regulators track online spending

The Ghana Revenue Authority (GRA) has partnered with two major regulators in the country (the Bank of Ghana (BoG) and the National Communications Authority (NCA) to help it monitor the amount spent on online services.
The authority has also deepened its collaboration with the telecommunication companies (telcos) to ensure that online services by non-resident businesses were properly monitored and accounted for to allow for proper charging and collection of taxes.

The collaboration paves the way for the GRA to determine how much Ghanaians spend on WhatsApp, Instagram, YouTube, Netflix, Amazon and Google, among others, to enable it to collect value-added tax (VAT) from the non-resident businesses.

The monitoring of transactions also applies to betting and gaming companies that are not based in Ghana, although their services are consumed by Ghanaian residents.

Take off date

The Commissioner of the Domestic Tax Division (DTRD) of the GRA, Mr Edward Appenteng Gyamerah, told the Daily Graphic last Friday that although the country had passed the VAT Act (2013), Act 870 that allowed the authority to impose VAT on online services consumed in the country, the GRA had been unable to implement the law.

Mr Gyamerah said the authority had now developed the needed tools and guidelines to be able to implement the law and collect the taxes due the state.

Consequently, he said it had set aside April 1, 2022, to start collecting VAT from non-resident persons and institutions that provided services for use and enjoyment in Ghana.

He added that the GRA had also developed a portal that the companies would use to register, file and pay their taxes to the state in accordance with Act 870.

“Most of the betting and gaming companies are also online and so this law applies to them,” he said.

Monitoring

He said a monitoring mechanism was also in place to ensure that “what they are declaring to us as revenue is the true reflection of their activities in Ghana.”

“With regard to monitoring e-commerce, a lot of institutions come on board. We have the role that the NCA plays and we have the role that the BoG plays,” he said.

“Remember that you cannot make any payment outside Ghana without passing through the BoG platform. The telcos also play their part through the mobile money and data services. All these institutions are onboard to support the compliance effort of the GRA as far as this VAT on e-commerce is concerned,” he added.

The Commissioner of the DTRD added that the authority was targeting to collect GH¢2.7 billion from the VAT on e-commerce and betting and gaming companies this year.

Of the amount, he said GH¢1 billion was to come from e-commerce while GH¢1.7 billion was expected from the betting and gaming space.