The Ghana Revenue Authority (GRA) has introduced a Real-Time Value Added Tax (RTVAT) Framework for cross-border digital services. This new mechanism aims to boost efficiency in revenue mobilisation and close the VAT collection gap. According to the GRA, Ghana's digital economy has grown rapidly, with 167 non-resident e-commerce businesses registered, contributing an estimated GH¢515 million in VAT annually. The RTVAT Framework is powered by the Sentinal system and is designed to ensure timely, accurate, and transparent VAT collection.
The RTVAT Framework identifies, monitors, and collects VAT on qualifying transactions. A transaction falls under RTVAT when three conditions are met: the payment instrument is issued in Ghana, the merchant is non-resident, and the service is supplied electronically. The GRA has clarified that RTVAT is not a new tax, but rather a mechanism for collecting VAT that is already due on cross-border digital services. The tax rate applicable is 15% VAT plus a combined levy of 5% for GETFund and NHIL, totalling 20%.
The GRA has outlined the obligations for non-resident digital service providers. Every non-resident supplying taxable digital services to consumers in Ghana must register for VAT, with no threshold. Registered providers must display prices exclusive of VAT and notify customers that VAT is applicable at the point of payment. Non-registered providers are required to register with GRA through the Authority's online portal. Real-time collection does not relieve providers of the obligation to file periodic VAT returns.
For customers, the experience is seamless, and they can continue to use their normal payment channels. The VAT is collected through participating payment platforms, and customers will be notified via SMS when the VAT is deducted. If a customer is wrongfully charged, they can notify the bank or Electronic Money Issuer (EMI) from which payment was made. All participating institutions have a dispute resolution mechanism in place.
The GRA's policy aims to ensure fairness, as local digital businesses already charge VAT, and foreign businesses must do the same. The RTVAT Framework levels the playing field and ensures timeliness, accuracy, and transparency in VAT collection. The GRA has urged customers and taxpayers to use only official GRA channels and approved Sentinal communications for further information.
The introduction of RTVAT is part of the GRA's reforms, which include the abolition of nuisance taxes such as the E-Levy and COVID-19 Levy, and the unification of VAT at 15%. The GRA's Commissioner General, Anthony Kwasi Sarpong, and Commissioner, DTRD, Dr Martin Kolbil Yamborigya, have expressed their commitment to ensuring voluntary compliance and closing the collection gap.
Elsie Appau-Klu, a Lawyer and Technical Advisor to the Commissioner-General of the Ghana Revenue Authority, has emphasised that RTVAT is a key effort to ensure voluntary compliance and close the collection gap. She chairs the Modified Taxation Implementation Committee and serves as the National Coordinator for the Sustained Tax Education Programme. The GRA's Year of Compliance has seen significant efforts to ensure that taxes work more effectively.
Key points
- The Ghana Revenue Authority has introduced a Real-Time VAT Framework for cross-border digital services to boost efficiency in revenue mobilisation and close the VAT collection gap.
- The RTVAT Framework aims to ensure fairness, timeliness, accuracy, and transparency in VAT collection, levelling the playing field for local and foreign digital businesses.
- The GRA has outlined obligations for non-resident digital service providers, including registration for VAT and displaying prices exclusive of VAT.
