The acting Commissioner-General of the Ghana Revenue Authority (GRA), Ammishaddai Owusu-Amoah, has indicated that among the GRA’s 2021 strategies to increase its revenue portfolio is an aggressive and vigorous taxation of e-commerce this year, as the regulation empowering the taxation is being streamlined and sensitisation is going on.
It is anticipated that implementation will begin from the second quarter of this year, as the first quarter will be used to streamline the regulation and embark on sensitisation to aid the GRA meet its revenue target for 2021. The GRA is targetting to collect some GHȼ60billion in 2021 to support national expenditure.
E-commerce taxation, he explained, will play a key role in ensuring the target is met – adding that the introduction of a new tax stamp to engender greater efficiency in the collection of exercise duties and using data analytics to ensure high net worth individuals pay the right taxes will also support its efforts to meet the target.
“There will be vigorous efforts to tax players in the e-commerce market. This sector has been a challenge over the years for the authority; but this year, we are providing staff with the requisite training to enable them identify players in the sector for tax purposes,” Mr. Owusu-Amoah told the media at an engagement on the GRA’s plans for 2021.
The acting Commissioner-General also revealed that all the necessary legislation needed to ensure smooth taxation of the sector are in place. The Value Added Tax (VAT) law, he noted, clearly stipulates the taxation of e-commerce – VAT Law 870 section 16. Currently, the GRA is rolling out an actualisation plan of the law, and the authority believes that this move will greatly affect its bottom line and shore-up government revenue significantly.
The Domestic Tax Revenue Division of the GRA has developed an action plan that will be presented to the authority’s board for approval and pave the way for taxation of e-commerce services before goods are roped-in. With dwindling revenue collection due to the effect of COVID-19 on businesses, and the boom being experienced in the e-commerce space due to measures and protocols outlined to fight the pandemic, the GRA believes taxation of the sector will be a game changer.
Ghana, within the last decade, has been witnessing rising activities in that sector, with the advent of platforms including eShopAfrica.com, tonaton.com, carmudi.com.gh, lamudi, jumia, OLX, baahe.com, tisu, zoobashop, kaymu, ahonya, Ghanacar24.com, Cheki Ghana, Shopadollar, Hellofood, VIVIA, Dziffa.com and several others.
Many of the players in the sector say they are ready to comply, but they fear the move might slow activities as there will be a pass-on effect to their customers – making the cost of their services go up.
The total value of e-commerce in Africa reached US$16.5billion in 2017, and the amount is expected to reach US$29billion by 2022. Although data is not immediately available for Ghana specifically, the use of digital channels for commerce has increased exponentially since March because of the COVID 19 outbreak – and there are no indications when the situation will subside. Indeed, the conventional wisdom now is that even when the pandemic does subside, digital commerce will retain a larger share of total commerce values and volumes than hitherto.