Tax analyst, Francis Timore Boi says intensive public education will be critical as the Ghana Revenue Authority prepares to introduce an automated Value Added Tax (VAT) deduction system on online purchases.
The system, expected to take effect in August, will automatically deduct VAT at the point of payment for online purchases of goods and digital services. The Authority says the initiative is aimed at improving tax compliance and strengthening domestic revenue mobilisation as digital commerce expands.
Timore Boi noted that the policy direction is appropriate, explaining that VAT should apply equally to both in-store and online transactions to ensure fairness within the tax system.
“The policy intention is good, it creates fairness in the system. If VAT is payable on transaction physical, it must also be paid online when it happens.”
However, he cautioned that implementation could pose challenges and stressed the importance of public awareness ahead of the rollout.
In his view, effective public education by the Authority will be essential to ensure the policy works as intended and achieves its revenue objectives.
He also pointed out that gaps in the taxation of digital transactions have created loopholes that need to be addressed.
“It has been a big loophole. It has been a tax haven for most transactions… digital transactions should not create a free tax space for people to move there, whilst those who have stores and physical locations are suffering the tax.”
According to him, careful implementation supported by sustained sensitisation will enable government to mobilise more revenue from the growing digital economy.
