Ghana: E-commerce platforms projected to generate $1.3bn in revenue by 2025
E-commerce platforms in the country are projected to generate some $1.3bn from the purchases of goods online by 2025.
The projected revenue is more than twice the $638m revenue generated last year – 2021 – by e-commerce platforms.
For this year – 2022 – e-commerce platforms in the country are anticipated to witness a 19 percentage points increment in revenue as total revenue for 2022 is expected to hit $759m.
Reiterating the above findings by Statista with regards to Ghana’s e-commerce space at the Graphic/Stanbic Bank Breakfast Meeting on Tuesday, March 22, Country Manager for Visa Ghana, Adoma Owusu, stated that wide technological adoption will provide further impetus for the growth of e-commerce in Ghana and the African continent at large.
According to her, a recent study by Visa indicates that various key macroeconomic and demographic trends are going to re-enforce the growth of e-commerce in Ghana, on the African continent and the world at large in the coming years.
E-commerce in the last 10 years has experienced phenomenal growth around the world, according to an UNCTAD report in 2019 titled Estimates of Global E-commerce and Assessment of Covid-19 impact on Online Retail, global e-commerce stood at a total value of $26.7trn in 2019, which was up by 4% from the 2018 figures and represents 30% of global GDP.
E-commerce sales are projected to rise to about $30trn across the globe by 2024.
GRA urged to apply 1% withholding tax to e-commerce platforms
Meanwhile, a lecturer at the University of Ghana (UG) School of Law, William Owusu Demitia, is advocating for the application of a 1% withholding tax to e-commerce platforms by the Ghana Revenue Authority (GRA).
The call for the application of withholding tax to e-commerce platforms operating in the country is in furtherance to the generation of revenue from e-commerce activities undertaken by these platforms.
Also speaking at the Graphic Business/Stanbic Bank Breakfast Meeting, Mr Dimitia, averred the country’s withholding tax laws should be reviewed with goal the of making e-commerce platforms withholding tax agents for the GRA.
“Our laws on withholding tax need to be looked at, because when payments are made on these platforms, the data aggregators (e-commerce platforms) are the ones that hold the monies and pay the monies to the vendors.
“Under the law, it is only a person who makes payment that has the withholding obligation if certain thresholds are satisfied.
“In other jurisdictions, withholding tax agents include anybody who has custody of the money, and in this case you could have the data aggregator (e-commerce platform) whose app is being used being a withholding agent for the appropriate taxes to be deducted at source and paid to the GRA,” he remarked.
Withholding tax is a tax which is deducted at source by a withholding agent (a person required to deduct tax) when making payment to another person and accounted for later to the GRA.
Government to raise GHC 1.7bn from e-commerce tax
Government is set to rake in some GHC1. 7 billion as tax revenue from non-resident Ghanaians who undertake online businesses and electronic commerce [e-commerce].
This comes on the back of the request by the Ghana Revenue Authority to begin the mobilization of taxes on these electronic channels from next month – April 2022.
This will be on a pilot basis and the first phase of the initiative as GRA prepares to include all local firms as well.
According to the Commissioner-General of the Ghana Revenue Authority, Rev. Dr. Amishaddai Owusu-Amoah, all is set to tax online businesses of non-resident Ghanaians.
He noted that the move is to ensure that the country mobilises adequate revenue and widens the tax net for national development.
Adding that, all non-compliant companies will be blocked from doing any profitable business in Ghana through a system operated in collaboration with the Bank of Ghana.
Also known as the social media tax, this tax mechanism will capture businesses on Facebook, Whatsapp, Netflix, Amazon, among others.
