Ghana GRA: Mandates Payment Processors for Digital Services VAT Collection

• Ghana's GRA is implementing a new system for collecting VAT on cross-border digital services, utilizing the GRA Sentinal system.
• This initiative mandates banks, mobile money operators, and other licensed payment companies to collect VAT at the point of payment for foreign digital services.
• The 20% combined VAT rate on these services is not new, having been law since 2022 under amendments to the Ghana Value Added Tax Act, 2013 (Act 870), and now governed by the Value Added Tax Act, 2025 (Act 1151).
• Consumers will see VAT itemized at checkout, and those using previously non-compliant foreign providers will now pay the tax.
• The system applies specifically to online digital services from foreign providers paid for with Ghana-issued payment methods.

This marks a significant shift from the previous reliance on self-declaration by the foreign companies themselves, a method that proved slow and uncertain, especially given the absence of a physical presence for many of these businesses in Ghana.

The Ghana Revenue Authority (GRA) is rolling out a new system designed to enhance the collection of Value Added Tax (VAT) on digital services provided by entities located outside Ghana. This initiative, approved by Parliament in July 2026, aims to streamline the process and ensure compliance, particularly from foreign companies that have previously not remitted the legally required tax. The core of this new approach involves the GRA Sentinal system, which will facilitate VAT collection directly at the point of payment.

Under this revised framework, financial institutions such as banks, mobile money operators, and other licensed payment companies operating in Ghana are mandated to connect to the GRA's Sentinal system. These entities will now be responsible for collecting the applicable VAT when a Ghanaian customer pays for a digital service from a foreign provider. This marks a significant shift from the previous reliance on self-declaration by the foreign companies themselves, a method that proved slow and uncertain, especially given the absence of a physical presence for many of these businesses in Ghana. The new system is specifically designed to address the challenge of ensuring equitable Ghana GRA digital services VAT collection.

VAT on digital services sold to Ghanaian consumers by companies based abroad has been an established part of Ghana's tax legislation since 2022, initially formalized through amendments to the then-in-force Ghana Value Added Tax Act, 2013 (Act 870) by the Value Added Tax (Amendment) Act, 2022 (Act 1082). The Ghana Revenue Authority (GRA) has actively collected this tax since its inception. The Value Added Tax Act, 2025 (Act 1151), which repealed and replaced Act 870, became effective on January 1, 2026, and continues to govern this framework.

The combined VAT rate remains at 20 percent. This figure comprises a 15 percent VAT, alongside 2.5 percent for the National Health Insurance Levy and another 2.5 percent for the GETFund Levy. It is noteworthy that this rate actually represents a reduction from a previous 21.9 percent, which took effect in January 2026 following the enactment of the Value Added Tax Act, 2025 (Act 1151). Therefore, the current changes pertain solely to the method of collection for Ghana cross-border digital services VAT, not the tax itself.

For the average Ghanaian consumer, the process of purchasing digital services will largely remain unchanged, with no additional forms or steps required. Upon completing a transaction, customers will receive an SMS or email confirmation detailing the charges, including the VAT amount. However, two key differences will become apparent. Firstly, digital service providers that are already registered and compliant will now display their prices without VAT, with the tax being added at the point of payment. This means a listed price may appear lower, but the VAT will be itemized at checkout, making the tax component transparent rather than embedded within the initial price.

Secondly, customers subscribing to services from providers who were previously non-compliant and did not charge VAT will now see this tax deducted for the first time. While this might appear as a new charge, it is merely the consistent application of existing law. The scope of this new Ghana payment processors VAT collection system is deliberately narrow, applying only when three specific conditions are met: the payment is made using a Ghana-issued debit or credit card, mobile money account, or digital wallet; the service provider is based outside Ghana; and the service is delivered online, encompassing categories like streaming, cloud computing, and online gaming. The system includes provisions for automatic refunds if VAT is incorrectly charged, with customers advised to contact their payment provider or the GRA if issues persist.

Lawyers advising banks, mobile money operators, and other licensed payment companies in Ghana must ensure their clients comply with the mandatory connection to GRA's Sentinal system for VAT collection on foreign digital services. Foreign digital service providers selling to Ghanaian customers should be aware that VAT will now be collected at the point of payment, regardless of their registration status, impacting pricing display and customer communication.

Source: Original reporting via a public statement from the Ghana Revenue Authority