The Ghana Revenue Authority (GRA) is set to activate its Sentinel System on October 15, 2026, to enforce the payment of Value Added Tax (VAT) on foreign digital platforms. This move aims to close a loophole that has allowed foreign streaming and digital platforms to escape Ghana's tax net. The system will work with banks, mobile money operators, and payment processors to calculate and withhold VAT at the point of payment.
The Sentinel System, also known as Real-Time VAT (RTVAT), is designed to address the imbalance between local businesses and foreign digital companies. Local businesses have been charging and remitting VAT on their invoices, while foreign digital platforms have not been contributing to Ghana's tax revenue. The GRA's Commissioner-General, Anthony Sarpong, estimates that the system could have generated over GH¢2.5 billion in revenue in 2025.
The Sentinel System applies to payments made using Ghana-issued cards, mobile money accounts, or digital wallets for services delivered electronically, such as streaming, cloud storage, software subscriptions, online gaming, or online marketplaces. Everyday transactions like mobile money transfers, utility bill payments, or buying food are unaffected. The system does not introduce a new tax or raise existing tax rates; instead, it enforces the existing VAT law.
The VAT rate applicable to foreign digital platforms is 15 percent, plus a 2.5 percent National Health Insurance Levy (NHIL) and a 2.5 percent GETFund Levy, totaling 20 percent. The GRA has clarified that customers are not required to register for anything or change how they pay. The system will display the price of a service without VAT, and the customer will be debited the full amount, including VAT.
The GRA has addressed concerns about possible double taxation and higher costs for consumers of digital subscriptions and online shopping. The authority has stated that VAT is charged based on where a service is consumed, not where the seller is located. This means that a Ghanaian paying VAT through RTVAT will not be charged VAT again by the merchant.
Ghana's move to enforce VAT on foreign digital platforms is part of a global trend. The European Union began taxing digital services based on customer location in 2015, while South Africa, Kenya, and Nigeria already tax foreign digital services. New Zealand and the Philippines have also implemented similar taxes on offshore digital services.
The implementation of the Sentinel System and RTVAT mechanism is scheduled to take effect on October 15, 2026. The GRA has not provided further details on the implementation timeline or additional phases. The authority has assured customers that disputes over wrongly charged VAT can be resolved by contacting their bank or mobile money provider.
Key points
- The GRA's Sentinel System aims to generate an estimated GH¢2.5 billion in revenue from foreign digital platforms.
- The system applies to payments made using Ghana-issued cards, mobile money accounts, or digital wallets for electronic services.
- The implementation of the Sentinel System is part of a global trend to tax foreign digital services based on customer location.
