Policy and data analyst Alfred Appiah has raised four critical questions regarding Ghana’s implementation of a 20% Value Added Tax (VAT) on cross-border digital services. The Ghana Revenue Authority (GRA) is now collecting this tax through banks and mobile money providers. This new collection mechanism aims to improve tax compliance and revenue generation.
Appiah argues that these unresolved issues could create significant confusion for both consumers and businesses. The GRA states the 20% VAT on cross-border digital services is not new; only the collection method has changed. Banks and mobile money providers now deduct the tax directly when customers pay for services. They then notify customers via SMS or email about the deduction.
This initiative fits into Ghana’s broader strategy to strengthen domestic revenue mobilization. A June 2026 study by the Ministry of Finance and the Institute for Fiscal Studies estimated a substantial GHS 69 billion in potential VAT revenue went uncollected in 2024. This figure represents 5.9% of Ghana’s Gross Domestic Product (GDP). Foreign digital providers are estimated to generate GHS 515 million annually, a comparatively modest sum against the larger compliance challenge.
Alfred Appiah specifically questions what happens if foreign digital service providers delay updating their prices. Registered providers should display prices excluding VAT, allowing banks to add the tax at payment. Appiah asks if customers could temporarily pay VAT twice: once through the provider’s price and again through the bank’s deduction. This scenario could lead to consumer frustration and distrust in the new system.
Another key concern involves how businesses will recover VAT charged on digital services. Businesses typically recover eligible VAT paid on their inputs. However, companies purchasing services like Google Ads or cloud computing with bank cards may have VAT automatically deducted. Appiah seeks clarity on how these businesses can claim this tax back. Without a clear process, this recoverable expense could become an additional business cost, impacting profitability.
Appiah also highlights the need for clear timelines and an accessible process for customer refunds. Customers incorrectly charged must seek refunds through their banks or mobile money providers. The analyst questions how quickly these refunds will be processed. An inefficient refund system could erode public confidence and create unnecessary disputes.
Finally, Appiah raises concerns that Ghana’s relatively high 20% VAT rate could encourage tax avoidance. This rate is higher than Kenya’s 16%, South Africa’s 15%, Egypt’s 14%, and Nigeria’s 7.5%. The analyst suggests this significant difference might prompt some users to seek alternative payment channels. These channels could fall outside the new collection system, undermining the GRA’s revenue objectives. For Appiah, the objective extends beyond collecting taxes from digital transactions. The GRA must provide clear answers on pricing, business refunds, customer complaints, and potential avoidance. This ensures the system is transparent, fair, and effective for all stakeholders.