The Ghana Revenue Authority (GRA) has moved to correct widespread public misperception over its new digital tax collection system, insisting it is not a fresh levy but a smarter way to collect an existing Value Added Tax (VAT) on cross-border digital services.
At the centre of the clarification is GRA Commissioner-General Anthony Sarpong, who said in an interview with Joy FM on Wednesday, October 14, that the Real-Time VAT (RTVAT) framework — powered by the Sentinal® system — simply changes how the tax is collected, not whether it applies.
“It’s not a new tax, it’s not a new imposition of tax,” Sarpong said, dismissing fears of a new burden on consumers. “We are using technology to smartly account for and collect the component that belongs to the government of Ghana.”
The confusion, he explained, stems from a long-standing problem: the GRA could not independently verify what foreign digital companies were earning in Ghana. “For every payment, we will know how many transactions took place,” Sarpong said, describing a system that finally gives the authority visibility it never had.
A Tax That Was Always There — But Never Fully Collected
VAT on cross-border digital services supplied by non-resident companies has been on Ghana’s statute books since the Value Added Tax Act, 2013 (Act 870). Under that law, foreign providers of electronically supplied services — streaming platforms, cloud providers, online marketplaces — were required to register with the GRA and charge VAT on sales to Ghanaian consumers.
In practice, however, collection was patchy. As of 2022, only a handful of non-resident e-commerce entities were on the GRA’s radar. By 2026, that number had grown to about 167 registered non-resident businesses, mobilising an average of GH¢43 million monthly and contributing an estimated GH¢515 million in VAT annually.
Yet a significant gap remained. Under the old system, the GRA relied on foreign companies to self-declare their transaction volumes and remit the tax. There was no independent way to verify the figures. The Sentinal system is designed to close that gap by moving from trust-based compliance to automated enforcement.
How the Sentinal System Works
The legal foundation for the reform is the Value Added Tax Act, 2025 (Act 1151), which took effect on January 1, 2026. The new law streamlined the tax structure — abolishing the 1% COVID-19 Health Recovery Levy and decoupling the GETFund and NHIL levies from the VAT base — bringing the effective rate down from 21.9% to a consolidated 20%.
That 20% comprises a 15% VAT, a 2.5% National Health Insurance Levy (NHIL), and a 2.5% Ghana Education Trust Fund (GETFund) Levy.
The Sentinal system operates as an automated checkpoint embedded in Ghana’s payment infrastructure. When a consumer pays for a qualifying service using a Ghana-issued card, mobile money account, or digital wallet, the system splits the transaction. The tax component is withheld and remitted to the GRA in real time; the balance goes to the service provider.
Sarpong illustrated with a simple example: “At the point of payment, the system will take the 20 and give it to the Government of Ghana, which is the tax component, and remit the 100 ordinarily to Netflix.”
Consumers will receive an SMS notification when the VAT is deducted.
A transaction falls within RTVAT only when three conditions are met: the payment instrument is Ghana-issued, the merchant is non-resident, and the service is supplied electronically. Local mobile money payments and utility bill settlements remain unaffected.
Scope: From Streaming to AI
The affected services span a wide range:
· Streaming and entertainment: Netflix, Spotify, Disney+, Showmax, beIN Sports, HBO, Apple TV, Amazon Prime
· Productivity and cloud: Microsoft 365, Google Workspace, Adobe, Zoom, AWS, Google Cloud, Microsoft Azure, DigitalOcean
· AI and social platforms: ChatGPT, online advertising on Google, Meta, TikTok, and LinkedIn
· Gaming and other digital services: PlayStation Plus, Xbox Game Pass, Apple Arcade, VPN and cybersecurity services, online learning platforms
Sarpong clarified that the initial rollout covers services, not physical goods. Imported products are already subject to customs procedures and duties when they enter Ghana through airports and seaports, he noted.
92 Already Paying, 100 More in the Pipeline
The GRA currently receives VAT remittances from about 92 foreign digital service providers. Sarpong said customers of these compliant companies should not see price increases from the change in collection method.
“Nothing will change in terms of pricing from 92 merchants or entities,” he stated.
However, the authority has identified approximately 100 additional foreign digital service providers that are not currently charging VAT. These will be brought into the collection system gradually as the GRA expands compliance. The Commissioner-General stressed that the intervention is not intended to trigger an arbitrary 20% increase across the board.
Banks and Payment Providers as Collection Agents
Under the RTVAT framework, commercial banks, mobile money operators, and payment service providers are now designated as withholding agents. They are required to integrate with the Sentinal platform and remit the tax to the GRA through the national settlement system.
Several banks have already notified customers that the applicable taxes will be included in the total amount charged when debit cards are used for qualifying services, emphasising that these are statutory obligations, not bank-imposed fees.
Sarpong confirmed the system covers multiple payment channels: “So it’s not only for a card… any other digital payment platform you are using, at the point of payment, the system will split the value into two.”
Revenue Potential and Broader Reform
The GRA estimates that the Sentinal system could have generated over GH¢2.5 billion in 2025 alone — revenue that would bolster essential public services like healthcare and education.
The reform is part of a broader modernisation agenda under Sarpong’s leadership, which includes the rollout of an Integrated Tax Administration System aimed at bringing more of Ghana’s digital economy into the tax net.
Ghana’s adoption of real-time digital VAT collection aligns with global trends. The European Union, South Africa, Kenya, Nigeria, and New Zealand have implemented similar measures to tax foreign digital services.
Addressing Double Taxation Concerns
The GRA has moved to allay fears of double taxation. If a merchant is a VAT-registered non-resident, consumers will not pay VAT again directly to the merchant. RTVAT is collected on the consumer’s behalf at the point of payment, and foreign merchants registered under the Simplified VAT Regime will have real-time collections reconciled with their VAT returns.
The authority has also cautioned that transactions outside the RTVAT scope — such as SWIFT transfers or payments via foreign cards — are not exempt from VAT and may fall under other tax regimes.
For consumers, the experience is designed to be seamless. “Do I need to do anything differently? No. Customers can continue to use their normal payment channels,” the GRA said in its public guidance.
