Countries around the world are grappling with how to tax the digital economy effectively.
Many governments have introduced or are considering digital services taxes to capture revenue from tech giants that benefit from local markets without necessarily having a substantial physical presence.
Dr Alex Ampaabeng, Deputy Finance Minister has made a call for the taxation of major digital platforms such as Facebook, YouTube, and online trading companies.
This move,he said, is part of a broader strategy to increase government revenue and ensure that these global tech giants contribute their fair share to the local economy.
Speaking on Channel One TV, Dr Ampaabeng pointed out various potential revenue sources for Ghana, including online businesses and content creation companies.
He, however, questioned why other 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.
He said these social media companies earn profits from the advertisements they display, and online trading companies also generate income from the sale of their products and services.
He mentioned online trading companies such as Jiji, Jumia, and Tonaton, which he believes surpass all physical marketplaces in Ghana in size.
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 stated that 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.
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.
Taxing digital platforms like Facebook, YouTube, and online trading companies represents a significant shift in Ghana's tax policy, aiming to modernise the tax system and ensure fair contribution from all sectors of the economy, he noted.
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