Banks to collect 20% tax on Netflix, Spotify, ChatGPT subscriptions from October 15

Commercial banks in Ghana are set to begin collecting a combined 20% tax on qualifying cross-border digital services from October 15, 2026, potentially increasing subscription costs for users of platforms such as Netflix, Spotify and ChatGPT where the applicable taxes are not already included in advertised prices.

The implementation follows directives from the Ghana Revenue Authority (GRA) requiring banks to collect and remit applicable taxes on qualifying digital transactions made using Ghana-issued bank cards.

The affected services cover a broad range of digital products, including streaming platforms such as Netflix, Spotify, Disney+, Showmax and beIN Sports; productivity tools such as Microsoft 365, Adobe, Zoom and Google Workspace; and artificial intelligence services such as ChatGPT.

Other potentially affected transactions include payments for cloud computing services such as Amazon Web Services (AWS), Google Cloud and DigitalOcean, as well as online advertising on platforms operated by Google, Meta, TikTok and LinkedIn.

Depending on the nature of the transaction and the applicable rules, the tax may also apply to qualifying payments for online learning, digital gaming, virtual private networks (VPNs), cybersecurity services, travel bookings and business communication tools.

Some banks have already notified customers that the applicable taxes will be added to the total amount payable when their debit cards are used for qualifying services. The banks have, however, stressed that the charges are statutory obligations rather than fees imposed by the financial institutions.

No new tax, but a change in collection

The October 15 rollout does not introduce a new tax on digital services. Instead, it changes how the applicable taxes are collected, placing greater responsibility on participating banks and payment service providers to deduct the relevant amounts when qualifying transactions are processed and remit them to the GRA.

The legal basis for the arrangement is the Value Added Tax Act, 2025 (Act 1151), which took effect on January 1, 2026.

The effective 20% rate comprises 15% Value Added Tax (VAT), a 2.5% National Health Insurance Levy (NHIL) and a 2.5% Ghana Education Trust Fund (GETFund) Levy.

The measure is intended to improve tax compliance and strengthen domestic revenue mobilisation from cross-border digital transactions by collecting the applicable taxes at the point of payment.

How much customers could pay

For a qualifying digital subscription priced at GH¢1,000 before taxes, customers would pay GH¢150 in VAT, GH¢25 in NHIL and GH¢25 in GETFund Levy.

The three charges amount to GH¢200, bringing the total cost of the subscription to GH¢1,200.

Consequently, customers could face a 20% increase in the cost of affected services where the applicable taxes have not already been incorporated into the advertised prices.

The financial impact could extend beyond individual subscribers to businesses that depend on foreign software, cloud infrastructure, digital advertising and artificial intelligence tools for their operations.

Companies using multiple subscriptions to support their daily activities could face higher operating expenses as the additional charges are applied to qualifying payments.

The arrangement also raises the importance of transparency in digital transactions, particularly in ensuring that customers understand how the taxes are calculated and whether service providers have already included them in their prices.

Its effectiveness will depend on consistent implementation by participating banks and payment service providers, alongside clear communication to customers to avoid confusion over the additional charges.