Tano North Member of Parliament, Dr Gideon Boako, has criticised the government’s implementation of Value Added Tax (VAT) on foreign digital services, comparing the policy to a reintroduction of the controversial Electronic Transfer Levy (E-Levy).
In a statement published on Friday, October 16, Dr Boako argued that the 20% VAT on qualifying digital services could increase the cost of online transactions for Ghanaians who use mobile money platforms and bank cards to pay for digital products and services.
He warned that the policy could place additional financial pressure on young entrepreneurs, small business owners and other users who depend on digital platforms to promote their products, reach customers and grow their businesses.
Dr Gideon Boako Raises Concerns Over VAT on Mobile Money Payments
According to the Tano North MP, the implementation of VAT on foreign digital services could affect payments made through mobile money platforms such as MTN MoMo, Telecel Cash and AT Money, as well as transactions involving bank cards.
Dr Boako expressed concern that the tax could increase the cost of accessing online services, particularly for businesses that rely on digital advertising and subscription-based tools to remain competitive.
He cited services such as Facebook, Instagram and TikTok advertising, alongside professional applications including Canva Pro and CapCut Pro, as examples of digital tools used by entrepreneurs to market their products and manage their operations.
He explained that many users pay for these services as business investments rather than for entertainment, arguing that the additional tax could affect their operating expenses and profitability.
“The lady boosting her business on Facebook with MoMo is not Netflix. She is not watching movies. She is trying to survive without a government job,” Dr Boako wrote.
His comments questioned whether business-related digital expenditure should be treated in the same way as entertainment subscriptions when assessing the impact of the VAT policy.
MP Describes Digital Services VAT as ‘E-Levy Pro Max’
Dr Boako described the government’s digital services tax arrangement as “E-Levy Pro Max,” arguing that consumers could face higher costs on payments for foreign digital services despite the abolition of the Electronic Transfer Levy.
He questioned whether the new VAT arrangement clearly distinguishes between ordinary money transfers and payments made for taxable digital products and services.
The MP maintained that the distinction is important because mobile money is widely used in Ghana for personal transfers, commercial transactions and payments for online services.
He warned that any confusion surrounding the application of the tax could create uncertainty for consumers and businesses that depend on digital payment systems for their daily activities.
Dr Boako Calls on GRA to Clarify Double Taxation Concerns
The Tano North MP has also called on the Ghana Revenue Authority (GRA) to provide further clarification on how the VAT policy will be administered.
He specifically questioned what safeguards would be introduced to protect consumers against potential double taxation and how refunds would be processed in cases where VAT is charged incorrectly.
According to Dr Boako, clear guidelines are needed to explain how the tax applies to foreign digital services, how payments through mobile money and bank cards are treated, and what steps consumers can take to resolve disputed charges.
He argued that greater transparency from the GRA would help businesses and individuals understand their tax obligations and avoid unnecessary financial burdens.
VAT on Foreign Digital Services Sparks Debate Over Business Costs
Dr Boako maintained that the government should openly acknowledge the potential financial implications of the VAT policy for consumers, digital entrepreneurs and small businesses.
He argued that the measure should not be presented solely as an administrative mechanism for collecting an existing tax without adequately addressing its practical effects on people who rely on digital services to earn a living.
The concerns raise broader questions about digital taxation in Ghana, including how the government can generate tax revenue while supporting entrepreneurship, electronic commerce and the growth of the digital economy.
As more Ghanaian businesses use social media advertising, online design applications and digital marketing tools to attract customers, the cost of accessing these services remains an important issue for entrepreneurs.
The debate over VAT on foreign digital services is therefore likely to centre on tax compliance, consumer protection, transparency and the need to balance government revenue objectives with the growth of Ghana’s digital business sector.
Source: newsthemegh.com