Ghana enacts various amendments to tax laws introduced in the 2023 Budget Statement

Executive summary

The Parliament of Ghana has enacted the following tax law amendments:

• Electronic Transfer Levy (Amendment) Act, 2022, Act 1089

• Revenue Administration (Amendment) Act, 2022, Act 1086

• Value Added Tax (Amendment) (NO. 2) Act, 2022, Act 1087

These Acts were enacted as part of the various tax measures introduced by the Government in the 2023 Budget Statement (the 2023 Budget) after various tax bills were drafted and presented before Parliament. For background on the 2023 Budget, see EY Global Tax Alert, Ghana | Tax highlights of 2023 Budget Statement and Economic Policy | EY - Global, dated 30 November 2022.

This Alert highlights the key aspects of the amended Acts.

Detailed discussion

These Acts were enacted in line with the various tax measures introduced by the Government in the 2023 Budget.

The Acts were published in the Official Gazette on 29 December 2022. As the Acts did not set forth effective dates, they came into force on the date of publication in the Official Gazette, i.e., 29 December 2022.

Electronic Transfer Levy (Amendment) Act, 2022, Act 1089

The Electronic Transfer Levy Act, 2022, Act 1075 is amended as follows:

1. The Levy to be charged on electronic transfers has been amended to 1%.

2. A charging entity is required to file a return in respect of the levy with the Commissioner-General (CG) in the manner and at the time and place determined by the CG and pay the levy that has been charged on electronic transfers within 24 hours after charging the amount.

3. An “agent” is defined as a person registered with the Ghana Revenue Authority (GRA) who provides agency services to customers on behalf of a principal under an agency agreement.

4. A charging entity is defined as an entity listed in the First Schedule.

The entities listed in the First Schedule include:

• Electronic money issuers

• Payment service providers

• Banks

• Specialized deposit–taking institutions

• Other financial institutions prescribed by Regulations made under the Act

Revenue Administration (Amendment) Act, 2022, Act 1086

The Revenue Administration Act, 2016, Act 915 is amended as follows:

Access to physical network node

For the purposes of a tax law, the CG may establish a monitoring mechanism to verify the actual revenue that accrues to a taxpayer for the purpose of computing taxes due and a person is required to provide the CG or an authorized tax officer with physical access to the physical network node or infrastructure or system of that person at an equivalent point in the network or infrastructure or system where the system of the taxpayer is connected.

A person who refuses to provide the CG or a tax officer with physical access to the physical network node or infrastructure or system of that person is, in addition to the penalty for failing to comply with a tax law, liable to pay to the GRA a penalty of 5% of the annual gross revenue of that person.

This amendment has effect despite a provision in an enactment relating to confidentiality, privilege, or the public interest with respect to the production of, or access to, a document.

Value Added Tax (Amendment) (NO. 2) Act, 2022, Act 1087

The Value Added Tax Act (VAT), 2013, Act 870 is amended as follows:

Rate of tax

Except as otherwise provided in the VAT Act, the VAT rate is 15% and is calculated on the value of the taxable supply of the goods or services or the value of the import.

A taxable person who is a retailer of goods and makes at the end of any period of twelve months, taxable supplies not less than GHS 200,000 but not exceeding GHS 500,000 shall account for the VAT payable at a flat rate of 3% calculated on the value of the taxable supply.

The application of the flat rate of 3% does not apply to the supply of any form of heat, refrigeration, or ventilation.

Taxable activity

The acceptance of a wager or stake in any form of betting or gaming, including lotteries and gaming machines is excluded from being a taxable activity under the VAT Act.

Betting as a supply of service

Subsection 2 of section 22 of the VAT which provides that “the placing of a bet by a person with another person operating a game of chance is a supply of services by that other person operating the game of chance to the person” has been repealed.

Issue of Tax Invoice or sales receipt

A person who:

• Issues a false tax invoice or sales receipt

• Fails to issue a tax invoice or sales receipt

• Fails to issue a tax invoice through a Certified Invoicing System (CIS)

• Tampers, manipulates, or interferes with the proper functioning of a CIS

• Fails to integrate the CIS of the taxable person into the invoicing system of the CG; or

• Fails to re-connect the CIS of that person to the invoicing system of the CG

is, in addition to the penalty for failing to issue a tax invoice, liable to pay a penalty of an amount of not more than GHS50,000 or three times the amount of tax involved, whichever is higher.

Except as otherwise directed by the CG, a taxable person shall, upon the coming into force of the Amendment is required to comply with the provisions of this section which primarily requires a taxable person to issue a tax invoice through a CIS. See Ghana enacts various amendments to tax laws introduced in 2022 Mid-year Budget Review Statement (ey.com) for further information on the issuance of a tax invoice through a CIS.

The provisions of the Act that an extension of time may be granted by the CG up to a period not exceeding three months where one is unable to comply with the provisions of this section within one year after its coming into force has been repealed.

Deductible tax input

An amount equal to the tax fraction of an amount paid during the tax period by the taxable person as a prize or winnings to the recipient of services of a taxable person operating the game of chance has been excluded from being a deductible input tax.

Exempt supply

The amendment specifies that an exempt supply does not apply to “imported textbooks, imported newspapers, architectural plans and similar plans, drawings, scientific and technical works, periodicals, magazines, trade catalogues, price lists, greeting cards, almanacs, calendars, diaries and stationery and other printed matter.”

An exempt supply has been specified to include “the acceptance of a wager or stake in any form of betting or gaming, including lotteries and from gaming machines."

Zero-rated supply

For a supply of good which is part of the transfer of a taxable activity as a going concern to be considered as a zero rated supply, a taxable person who commences the sale of a business as a going concern is required to give notice in writing to the CG of that fact, at least fourteen calendar days before the sale closes, purchaser acquires any legal interest in the assets to be acquired, or assets of the going concern are transferred, whichever date is earliest.

For additional information with respect to this Alert, please contact the following:

Ernst & Young Chartered Accountants, Accra

• Isaac Sarpong

Ernst & Young Société d’Avocats, Pan African Tax – Transfer Pricing Desk, Paris

• Bruno Messerschmitt

Ernst & Young LLP (United Kingdom), Pan African Tax Desk, London

• Kwasi Owiredu

Ernst & Young LLP (United States), Pan African Tax Desk, New York

• Brigitte Keirby-Smith

• Dele A. Olagun-Samuel

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.