It is Friday evening in Accra. Ama renews her monthly streaming subscription with mobile money while, a few kilometres away, Kwame, who runs a graphic design studio in Madina, issues an invoice to a client, charges Value Added Tax (VAT) and pays it to the Ghana Revenue Authority (GRA).
From October 15, 2026, the GRA will introduce the Sentinel System as part of a new approach to collecting VAT on payments for digital services supplied by foreign businesses.
The system, known as Real-Time VAT (RTVAT), is intended to improve the collection of taxes already applicable to foreign digital service providers.
Not a new tax
RTVAT does not introduce a new tax or increase the existing VAT rate.
Since 2022, Ghanaian law has required foreign providers of digital services, including streaming platforms, to register with the GRA and charge VAT on services supplied to customers in Ghana. The challenge has been how to monitor and collect the tax.
The current legal framework is the Value Added Tax Act, 2025 (Act 1151), which came into force on January 1, 2026.
Under the existing system, the applicable charges are 15 per cent VAT, 2.5 per cent National Health Insurance Levy (NHIL) and 2.5 per cent Ghana Education Trust Fund (GETFund) Levy, bringing the total to 20 per cent.
Under Sentinel, the tax is calculated and collected at the point of payment through participating financial institutions.
How the system works
RTVAT applies when three conditions are met: the payment is made using a Ghana-issued card, mobile money account or digital wallet, the seller is a non-resident business, and the service is supplied electronically.
Services covered include streaming, cloud storage, online gaming, software subscriptions and online marketplaces.
If a foreign digital service costs GH¢100 before tax, the customer would pay GH¢120, comprising GH¢100 for the service and GH¢20 in VAT and levies.
The merchant receives the GH¢100, while the bank, mobile money operator, payment service provider or other designated intermediary withholds the GH¢20 and remits it to the GRA.
The customer receives a notification showing the tax deducted.
The system does not apply to ordinary domestic transactions such as buying food with mobile money, paying an ECG bill or transferring money to another person.
Customers do not need to register for the system or change how they make payments.
Addressing concerns
One concern surrounding the system is whether customers could be taxed twice.
The GRA's position is that customers who pay VAT through RTVAT should not pay the same VAT again to the merchant. For registered foreign merchants, amounts collected through the real-time system are accounted for in their VAT returns and reconciled accordingly.
Another concern is whether the system amounts to a tax on social media use. It does not. Using free platforms such as Facebook, WhatsApp or other services without making a taxable purchase does not trigger RTVAT.
The effect on prices will depend partly on whether a foreign provider was already charging Ghana VAT. Where VAT was already included in the price, the introduction of real-time collection should not create an additional tax. Where the provider was not charging the applicable VAT, the customer will now pay the tax required under Ghanaian law.
Ghana follows global trend
Ghana is not the only country to tax foreign digital services.
The European Union introduced rules to tax digital services based on where customers are located in 2015. South Africa, Kenya and Nigeria also tax foreign digital services, while New Zealand introduced a 15 per cent Goods and Services Tax on offshore digital services in 2016.
Some jurisdictions are also moving towards collecting taxes automatically when payments are processed.
Revenue, competition
GRA Commissioner-General Anthony Sarpong has said an analysis of 2025 data indicated that the system could have generated more than GH¢2.5 billion for the state had it been in operation that year.
The revenue includes the NHIL and GETFund Levy, which support health insurance and education respectively.
The system also has implications for competition between local and foreign businesses. Ghanaian businesses that provide taxable goods and services are required to account for VAT, while foreign digital providers are subject to the same tax obligations where the law applies.
Not every international payment will pass through RTVAT. Examples include some SWIFT transfers, cards issued outside Ghana, cryptocurrency, gift cards and certain corporate invoicing arrangements. However, a transaction falling outside the real-time collection mechanism is not automatically exempt from VAT. Other applicable mechanisms, including the Simplified VAT Regime and reverse-charge arrangements in some cases, may still apply.
Foreign digital service providers are also required to display prices exclusive of VAT, notify customers that Ghana VAT will be added at payment, maintain records and remain compliant with their VAT obligations.
As the system takes effect, the key issue will be whether it improves the collection of VAT already required under Ghanaian law while providing clear information to consumers and businesses.