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Online Trading Platforms Set to be Taxed - Deputy Finance Minister

The government, through the Ministry of Finance, has announced its intention of taxing the various online trading platforms.

The ministry noted that, there are many businesses who are plying their trade online without being taxed.

This was disclosed in an interview with the Deputy Minister of Finance, Dr. Alex Ampaabeng who disclosed this on Channel One TV with Bernard Avle.

According to him, taxing these online platforms will cushion the economy and help the ministry leverage on the opportunities online businesses bring to the economy.

Dr. Ampaabeng underscored the need to have this tax implemented noting that the companies, both local and international, generate appreciable funds from their clients in Ghana.

Dr. Ampaabeng cited the potential revenue sources which includes online businesses and content creation companies.

Dr. Ampaabeng questioned the rationale behind national companies operating in Ghana are taxed, but social media platforms like Youtube and Facebook, which run numerous advertisements, are not included in the Ghanaian tax system.

According to the deputy Finance Minister, owners of the social media companies earn profits from the advertisements they display, and online trading companies also earn income from the sale of their products and services.

Other online trading platform’s which will be taxed in future are Jiji, Jumia, and Tonaton, which he believes surpass all physical marketplaces in Ghana in size.

He said, “I can’t think of a country which has not gotten 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. Go to Youtube and play a video, within one or two minutes, you are going to watch about two, or three adverts.

“What it tells you is that Facebook or Youtube is making profits right here in Ghana. Go to your Facebook account, and you are going to see a number of adverts on your right, left. What it is telling you is that Facebook is making profits right here in Ghana and not being taxed. Meanwhile, there are companies operating in Ghana, for jurisdiction reasons, of course, that are being taxed.

He further pointed out, “So then, it comes to the question of the application of our tax laws. Revenues generated in Ghana are subject to taxes. We have Facebook, TikTok and all those players, these are digital platform owners.”

He highlighted, “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.”

He expressed his hope that individuals earning online profits from Ghanaian residents would be taxed.

“There are conversations ongoing, 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 to Ghanaian residents, people who are generating revenue from Ghana are allowed to pay taxes,” he noted.

Additionally, he proposed a collaboration with the government to curb cybercrime by registering and verifying these online trading companies.

“We can have a system where the government engages these operators, so individuals will submit their Ghana Card and are registered and verified.”