Ghana Risks Revenue Loss Without Urgent Tax Reforms on Digital Currency, Says Tax Expert
- Exclusive: Fred Awuttey, Esq., warns of widening fiscal gaps as BoG advances eCedi and digital asset regulation without matching tax legislation
Ghana must urgently revise its tax laws to account for the rise of digital currencies and assets, or risk substantial revenue leakages and weakened fiscal oversight, according to Fred Awuttey, Esq., author of Modern Approach to International Taxation. In an exclusive interview with NorvanReports, the tax attorney and policy analyst called for immediate legislative action ahead of the government’s planned regulation of digital asset platforms by September 2025.
“The current Income Tax and VAT Acts are not equipped to deal with transactions involving digital currencies, especially where non-residents trade on platforms like Binance or Coinbase,” Awuttey said. “Without a clear legal definition and classification of digital currency, it becomes difficult to determine whether income from such transactions is business, investment, or simply a payment medium.”
His warning comes on the back of remarks by Bank of Ghana Governor Dr. Johnson Asiama, who told NorvanReports during the IMF Spring Meetings that the central bank will move to regulate unlicensed crypto platforms in Ghana while preparing for a medium-term rollout of the eCedi, Ghana’s central bank digital currency.
Unregulated Terrain, Undefined Income
Awuttey outlined several urgent tax policy gaps. Chief among them is the absence of any statutory definition of digital currency in Ghana’s tax code, a deficiency that undermines classification for capital gains, business income, or VAT applicability.
“There is no provision in Act 896 [Income Tax Act] for capital gains on digital assets. Unless a taxpayer is resident in Ghana, current law struggles to tax digital asset profits sourced here,” he explained.
Additionally, he noted that the VAT Act is silent on digital currencies, creating ambiguity around the taxability of services consumed via digital assets. For instance, if a Ghanaian uses digital currency to purchase services on an unregulated exchange, VAT may not apply, potentially eroding domestic revenue.
eCedi vs. Bitcoin: Legal Tender or Asset Class?
In distinguishing between CBDCs like the eCedi and private cryptocurrencies such as Bitcoin, Awuttey noted that central bank-backed tokens could be treated as legal tender or payment tokens, while privately issued cryptocurrencies should be taxed as investment assets.
“The eCedi should be regulated under the financial services regime, allowing income traceability. Privately issued crypto, by contrast, must fall under capital gains tax, with fees subject to VAT,” he said, citing global examples from the US and UK.
He also emphasised that eCedi-related transactions on a BoG-backed platform will enhance compliance, but only if tax provisions are integrated directly into the digital finance infrastructure.
Call for Inter-Agency Collaboration and Smart Regulation
To address compliance gaps, Awuttey urged inter-agency coordination between the Ministry of Finance, BoG, and the Ghana Revenue Authority (GRA) to design a unified fiscal response to digital finance. “If these institutions fail to collaborate, digital income will remain invisible to tax authorities.”
He proposed that Ghana’s upcoming digital asset legislation adopt a tiered licensing regime, integrated tax reporting, and AML-KYC obligations, along with stronger international cooperation under the Exchange of Information Act.
“A risk-sensitive, principles-based framework will allow innovation to flourish, while tightening oversight and preventing illicit financial flows,” he argued.
Preparing for the Next Wave: NFTs, DeFi, and Beyond
Awuttey also warned that Ghana’s tax system is not prepared for next-generation digital assets such as NFTS, tokenised commodities, and decentralised finance platforms.
“Our tax laws must explicitly include digital currencies, not just for direct income, but also for capital gains, service fees, and mining rewards. We cannot afford to wait for global consensus before acting.”
He called for amendments to the Income Tax Act, AML Act (Act 1044), and the Foreign Exchange Act (Act 723) to comprehensively cover digital transactions, an approach he argues will ensure that Ghana does not become a blind spot in global financial oversight.
Editor’s Note: This interview forms part of NorvanReports’ special series examining Ghana’s digital finance transition, following the Bank of Ghana’s announcement of impending regulation of crypto platforms and a future eCedi rollout.
