Thu, 13 Jun 2024 Business & Finance

I can’t think of a country which doesn't have a digital service tax system like Ghana — Deputy Finance Minister

Dr. Alex Ampaabeng, Deputy Finance MinisterDr. Alex Ampaabeng, Deputy Finance Minister

The Deputy Finance Minister Dr. Alex Ampaabeng, has weighed in on the government’s plan to introduce a digital tax system.

According to Deputy Finance Minister Dr. Alex Ampaabeng, a digital tax system has become necessary because many large technology platforms that generate significant revenues from Ghanaian users currently do not contribute to the country's tax base.

Speaking in an interview with Bernard Avle on Accra-based Channel One TV’s The Point of View on Wednesday, June 12, the minister noted that he has yet to see a country without a digital tax system.

“I can’t think of a country which does not have a digital service tax system of some sort, so Ghana is long overdue. Just to make an example so that people will appreciate where I’m coming from. On YouTube, within one or two minutes of playing a video, you are going to see about two or three adverts.

“This tells you that Facebook or YouTube is making profits right here in Ghana. On your Facebook account, you are going to see a number of adverts on your right and left. This means that Facebook is making profits right here in Ghana and not being taxed. Meanwhile, there are companies operating in Ghana, for jurisdictional reasons, of course, that are being taxed,” he explained.

The minister continued: “So then, it comes to the question of applying our tax laws. Revenues generated in Ghana are subject to taxes. We have Facebook, TikTok and all those players - these are digital platform owners.”

“Then we have the digital or market players, here we are talking about individuals who are using the digital platforms. We have Jiji, Jumia, Tonaton - these combined are bigger than all physical marketplaces in Ghana. And it tells you the volume of transactions that are going on there.”

“There are ongoing conversations; I wouldn’t want to pre-empt anything. Maybe in the future, it might not be anytime soon. What I would like to see is a Ghana where people who are earning all forms of profits in the country are subject to taxes. People who are trading online with Ghanaian residents, people who are generating revenue from Ghana are allowed to pay taxes,” he noted.

“We can have a system where the government engages these operators so individuals can submit their Ghana Card and register and verify themselves,” stressed Dr. Ampaabeng.

Isaac Donkor Distinguished
Isaac Donkor Distinguished

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