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The Ghanaian government has been urged to consider taxing the profits made by social media platforms, from the country, as part of the new drive to mobilise revenues from local business activities taking place on such platforms. This follows the introduction of a 21 per cent Value Added Tax (VAT) on advertisements on the social media platform, Facebook.
The Ghanaian government has been urged to consider taxing the profits made by social media platforms, from the country, as part of the new drive to mobilise revenues from local business activities taking place on such platforms. This follows the introduction of a 21 per cent Value Added Tax (VAT) on advertisements on the social media platform, Facebook.
The newly introduced charges, which takes effect from August 1, 2023, applies to both business and personal advertisements, according to Meta, the parent company of Facebook. It is understood that going by this, all advertisers with a business country of Ghana will be levied, a 2.5 percent National Health Insurance Levy (NHIL), 2.5 percent GETFUND, one percent COVID-19 Levy plus the original 15 percent VAT.Meta, in its communication on the development, said it is required to “charge VAT levies on sale of ads to advertisers, regardless of whether you’re buying ads for business or personal purposes.
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Commenting on the latest move which is deemed the government’s new approach in raking revenues from e-commerce and digital platforms, as part of its revenue mobilization agenda, the Senior Economic Analyst of NRGI, Dr. Alex Ampaabeng noted that there is more revenue potential to be explored from digital market players.He explained that the new tax implies that the customers in Ghana are the ones paying for consuming the service, but then the profit of those institutions or organizations is still left untouched.
Dr. Ampaabeng referenced the example of Kenya, which has slapped a three percent digital service charge as well as Nigeria which is also working on a six percent. So far, he said Kenya has proved that in less than seven months they generated over US$5 million.
