Ammishaddai Owusu-Amoah - Afrikan Heroes

New 1.75% Electronic Transaction Tax Set To Commence In Ghana

November 21, 2021

Ghana’s finance minister, Ken Ofori-Atta, has declared that an electronic transaction levy (e-levy) will be introduced in the 2022 budget.

The proposed levy is a 1.75 percent charge on the value of electronic transactions that will take effect on February 1, 2022. It includes payments made with mobile money, bank transfers, merchant payments, and inward remittances. Except for inward remittances, which will be borne by the recipient, the charge will be borne by the transaction’s originator. For transactions up to GH100 (US$ 16) every day, there is an exception.

Commissioner-General of the Ghana Revenue Authority, Ammishaddai Owusu-Amoah

According to the Finance Minister, total digital transactions are expected to exceed GH500 billion (US$81 billion) in 2020, up from GH78 billion (US$12.5 billion) in 2016. In just five years, the company has grown tremendously.

While the premise for this new fee is to broaden the tax net, given that the bulk of the population works in the informal sector, it appears to be a simple way for the government to raise income. The news of the levy was met with anger and concerns that it might jeopardize the country’s existing digitization effort.

A Suspended 9% Communication Service Tax

Last year, Ghana’s Communications Ministry ordered Mobile Network Operators (MNOs) to stop passing on the 9% Communication Service Tax (CST) to subscribers.

In a letter addressed to the National Communications Authority (NCA), and published in full below, the Communications Ministry stated that the CST should be treated the same way VAT, NHIL, GETFUND levy and all other taxes and levies imposed on entities doing business in Ghana were treated.

Before the suspension, MTN, AirtelTigo, Vodafone and Glo were charging their customers the full amount of the revised Communication Service Tax (CST) since October 1, 2019.

The CST, which was increased from 6% to 9%, and applied to any recharge purchase by subscribers. For every GH¢1 of recharge purchased, a 9% CST fee was charged the subscriber leaving ¢0.93 for the purchase of products and services.

In 2018, the CST tax was first introduced at an Ad Valorem Rate of 6 per cent.

The Commissioner-General of the Ghana Revenue Authority, Ammishaddai Owusu-Amoah also recently said the agency had not started taxing e-commerce in the west African country.

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No Taxes For E-commerce Companies In Ghana — Revenue Authority Says

May 18, 2020

The Commissioner-General of the Ghana Revenue Authority, Ammishaddai Owusu-Amoah has said the agency has not started taxing e-commerce. This is as the Ghana Revenue Authority has outlined measures to help boost revenue for the government as the coronavirus pandemic hits the various sectors of the economy.

“It (ecommerce) is one of the things that are already in our strategic plan that we are working on for this year and therefore we will come out with it at the right time,” Ammishaddai told Ghana-based JoyNews Channel.

Here Is What You Need To Know

According to Ghana ‘s chief tax man, even though there is no tax on ecommerce, GRA is seriously in the process of automating payment of value-added tax (VAT) in the country.

“We are looking at the Integrated Tax Application end-to-end that is also being worked on. So these are certain initiatives that are ongoing,” he added.

The Ghanaian government in its 2020 budget statement planned to raise GH¢67.1 billion ($11.6 billion), representing 16.9 percent of GDP, in total revenue. Out of the total expected figure for next year, GH¢65.8 billion is to be raised from domestic revenue, representing an annual growth of 22.5 percent over the projected resources for 2019.
Earlier this month, the Ghanaian Parliament amended the Income Tax (Amendment) Act 2015 to exempt withdrawals from third-tier provident funds and personal pension schemes from tax. This is to cushion individuals who have lost their jobs or capital due to the Coronavirus pandemic. This amendment in fiscal terms will amount to 639 million Ghana cedis if all funds are withdrawn under the given circumstances.