GHANA has unveiled a bold plan to levy taxes on the foreign incomes of resident Ghanaians in a bid to counterbalance a significant revenue shortfall resulting from the cancellation of value-added tax (VAT) on electricity earlier this year. The decision to roll back the VAT on electricity had left a considerable revenue gap of nearly GHC 1.8bn ($134 million).
The government’s move to impose VAT on electricity had triggered widespread public outcry, ultimately leading to its abandonment and the subsequent revenue shortfall. This VAT measure was part of Ghana’s agreement with the IMF to bolster its revenue.
The Ghana Revenue Authority (GRA) has now introduced a tax on foreign income earned by Ghanaian residents who spend a minimum of 183 days in the country. Commissioner General Julie Essiam explained that this initiative marks an extension and reinforcement of the existing tax framework. She indicated that the implementation process has commenced, with the GRA preparing to dispatch letters to affected individual account holders, expected to be delivered before May 2, 2024.
‘If individuals come forward within three months and disclose the amount in their foreign accounts, the interest on those accounts will be exempted. This underscores the voluntary disclosure aspect of this measure,’ Commissioner Essiam elaborated.
Earlier in December 2023, the Ghana Revenue Authority had announced the imposition of quarterly income taxes on e-hailing drivers and commercial vehicle owners, effective January 1, 2024.
Moreover, under the new tax regime, Ghanaian-based content creators and influencers earning from international platforms like YouTube, X platform, TikTok, and others will also be subject to taxation. This extends to remote workers utilising platforms such as Fiverr and Upwork.
Recent statistics from Statcounter reveal that from March 2023 to March 2024, YouTube accounted for 31.66 percent of Ghana’s social media traffic, while X platform had 9.74 percent. As of January 2024, Ghana’s social media user base had grown to 7.4 million, up from 6.6 million the previous year.
Additionally, with Ghana’s population slightly exceeding 34 million, the number of Internet users stood at 15.7 million in January 2021, representing a penetration rate of 50 percent. This implies that around half of Ghana’s population had Internet access in 2021, underscoring the potential impact of the expanded tax measures on digital incomes.
The introduction of these tax reforms reflects Ghana’s proactive efforts to enhance revenue mobilisation amid evolving economic dynamics and digital transformations.
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