Same tax, smarter collection

It is Friday evening in Accra. Ama settles onto her sofa, opens her phone and renews her monthly streaming subscription with mobile money. A few kilometers away, Kwame, who runs a small graphic design studio in Madina, issues an invoice to a client. It includes VAT, as the law requires, and he pays that VAT to the Ghana Revenue Authority (GRA) every month.

Here is the uncomfortable truth. Kwame pays his VAT. Many of the foreign digital companies that take Ama’s money every month do not. Ghanaian businesses have long competed on an uneven field with global platforms that operate in our market, earn from our people, and too often contribute nothing to the roads, schools and hospitals our taxes build.

From 15 October 2026, that begins to change. GRA is rolling out the Sentinal System, the engine behind a new approach called Real-Time VAT (RTVAT). There has been noise around it, some of it honest concern and some of it confusion. This article sets out plainly what Sentinal is, what it is not, and why every Ghanaian has good reason to welcome it.

First things first: this is not a new tax

Let us settle the biggest question at once. RTVAT is not a new tax. It does not create a new charge, increase any rate or tax anything that was not already taxable.

Since 2022, Ghanaian law has required foreign providers of digital services, such as streaming platforms, to register with GRA and charge VAT on what they sell to people in Ghana. The problem was never the law. The problem was collection. The old system relied almost entirely on these foreign companies to declare their own sales honestly and pay voluntarily. Many did. Many did not. GRA had no independent way to check.

The legal foundation today is the Value Added Tax Act, 2025 (Act 1151). This reform law came into force on 1 January 2026, and in fact it lowered the burden on consumers by scrapping the 1% levy. The rate that applies is the standard one every Ghanaian already knows: 15% VAT plus 2.5% NHIL and 2.5% GETFund Levy, 20% in total.

In GRA’s own words, the tax owed does not change; only the collection method does.

So what does Sentinal actually do?

Think of Sentinal as a smart checkpoint at the payment gate. Instead of waiting months for a foreign company to declare and remit VAT, if it ever does, the tax is worked out and set aside at the moment you pay.

It works with the institutions Ghanaians already use: banks, mobile money operators, payment service providers and third-party payment processors. A transaction falls under RTVAT only when three conditions are all present:

1. The payment is made with a Ghana-issued card, mobile money account or digital wallet;
2. The seller is a non-resident business, meaning based outside Ghana; and
3. The service is supplied electronically, such as streaming, cloud storage, online gaming, software subscriptions or online marketplaces.

If any one of those conditions is missing, RTVAT does not apply to that transaction. Buying kenkey with MoMo, paying your ECG bill or sending money to your mother in Ho are completely unaffected.

How it works: one payment, two parts

Suppose you subscribe to a foreign service priced at GH¢100. Under Sentinal:

• The merchant displays the price exclusive of VAT (GH¢100), with a clear notice that Ghana VAT is added at payment.
• You are debited GH¢120: GH¢100 for the service, GH¢15 VAT and GH¢5 for the NHIL and GETFund levies.
• The merchant receives its full GH¢100.
• Your bank or mobile money provider holds the GH¢20 as a withholding agent and pays it to GRA through the national settlement system.
• You receive an SMS notification showing the VAT deducted.

If you get a refund or a chargeback, the VAT is reversed automatically along with it. In the rare case that you are wrongly charged and the money is not returned automatically; you simply contact the bank or mobile money provider you paid through.

You do not need to register anything, fill any form or change how you pay. You carry on as normal.

Answering the concerns honestly

Every serious reform deserves scrutiny, and Sentinal has had its share. When Parliament approved the arrangement, the Minority opposed it, warning that it could lead to double taxation and make digital subscriptions and international online shopping more expensive for Ghanaians. These are fair questions, and they have clear answers.

“Will I be taxed twice?” No. VAT is a tax on consumption, and under the approach followed by most countries, services are taxed where they are consumed, not where the seller is based. A service consumed in Ghana attracts Ghana’s VAT. GRA’s guidance is explicit that a customer who pays VAT through RTVAT will not pay VAT again to the merchant. For registered foreign merchants, the amounts collected in real time are counted in their VAT returns and reconciliation, so the same tax is never paid twice.

“Is this a social media tax?” No. Sentinal only acts when money changes hands for a digital service. Scrolling Facebook, chatting on WhatsApp or watching free videos involves no payment, so there is nothing to tax. What is covered is a paid purchase from a foreign digital provider, which the law has taxed since 2022.

“Will prices go up?” For customers of foreign companies that were already charging Ghana VAT properly, the total cost should not change, because the tax was already built into the price. Where a foreign company was not charging VAT, customers will now pay the same VAT that every Ghanaian already pays at the local supermarket, pharmacy or restaurant. That is not a new burden. It is the end of an unfair exemption that some foreign sellers were quietly enjoying at the expense of local businesses like Kwame’s.

“What about transparency?” Questions about procurement and contracts are a legitimate part of our democracy, and Parliament is the right place for them. But they are separate from the principle at stake here: that tax already owed under Ghanaian law should actually be collected. Both can be true at once. We can demand accountability in how the system is procured and still support a mechanism that stops revenue leaking out of the country.

Ghana is not alone; we are catching up

Taxing foreign digital services is now standard practice across the world. The European Union moved to tax such services where the customer lives in 2015. South Africa, Kenya and Nigeria all tax foreign digital services. New Zealand began applying its 15% GST to offshore digital services in October 2016, in what the press nicknamed the “Netflix Tax”. The Philippines’ VAT law on digital services has been in force since June 2025.

The newest frontier is exactly what Ghana is now doing: collecting the tax at the point of payment. Brazil’s reform includes a split-payment system in which the tax is separated automatically when a payment is settled, with the supplier receiving the net amount. Across the world, tax authorities are increasingly using payment providers and app stores as reporting or collection points for digital services.

In adopting Sentinal, Ghana is not experimenting in the dark. It is joining a global movement and, in some respects, leading it on the African continent.

Why this matters for every Ghanaian

The numbers are sizeable. GRA’s Commissioner-General, Anthony Sarpong, has said the authority’s analysis of 2025 data show the system could have raised more than GH¢2.5 billion for the state had it been in place that year.

That money does not disappear into thin air. The NHIL portion supports the National Health Insurance Scheme. The GETFund Levy supports education, from classroom blocks to scholarships. Every cedi collected from a foreign platform is a cedi that does not have to come from a new tax on Ghanaians, or from more borrowing.

There is also a question of simple fairness. A Ghanaian software developer, a local streaming start-up or a small e-commerce trader all charge VAT. When a foreign competitor skips it, the local business loses. Sentinal restores balance so that residents and non-residents compete on the same terms.

A word of caution: outside RTVAT does not mean tax-free

Some payments will not pass through Sentinal, for example SWIFT or other international bank transfers, cards issued outside Ghana, cryptocurrency, gift cards and vouchers, or corporate invoicing arrangements. It is important to understand that a transaction falling outside RTVAT is not thereby exempt from VAT. Registered foreign suppliers must still account for VAT on those sales under the Simplified VAT Regime, and in some business cases the recipient may be required to account for it under reverse-charge rules. Sentinal is a better collection method, not a new list of exemptions.

What foreign merchants must do

Foreign digital service providers selling to Ghana must display prices exclusive of VAT, tell customers at checkout that Ghana VAT will be added at payment, keep proper records for reconciliation, remain VAT-registered and continue filing returns. Those not yet registered must register with GRA. Registered providers under the Simplified VAT Regime are being given a transitional period to adjust their billing and checkout systems, and GRA will announce the end date of that period.

Get your facts from the right source

With any new system, rumours and scams follow. Rely only on official GRA channels, including gra.gov.gh, and official communications from your bank or mobile money provider. Remember that a genuine tax notification never needs your PIN; never share it with anyone who calls or texts claiming to be from GRA.

The bottom line

Sentinal does not ask Ghanaians to pay more than the law already requires. It asks global digital companies to pay what they already owe, in the same way that Kwame in Madina and millions of other Ghanaian businesses already do.

Same tax. Smarter collection. A fairer deal for Ghana.

About the author

Christopher Beyereh is a Chartered Marketer, a tax & AI expert with over 10 years of experience.

He is the Founder of the African Center for tax education and Policy (ACTEP), and the African Society of Artificial Intelligence (ASAi). He can be reached via +233246440723 or cbeyereh@gmail.com