Finance Minister defends VAT on imported services

Finance Minister Dr Cassiel Ato Forson has defended the government's decision to apply Value Added Tax (VAT) to imported services consumed in Ghana, arguing that the policy broadens the country's tax base while ensuring fairness in the tax system.

Speaking in an interview on Citi FM on Friday, July 24, 2026, Dr Forson explained that VAT is based on where consumption occurs rather than where a product or service originates.

"They don't pay VAT because it's not consumed here. But if you consume it here, you have to pay the consumption tax on it," he said.

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The Finance Minister said exempting imported services from VAT would undermine efforts to expand the tax base and could ultimately require higher tax rates to generate the same level of revenue.

"We are talking about broadening the tax base. If I'm to exempt it, I'm not broadening the tax base; I may be forced to increase the rate," he stated.

Dr Forson also highlighted the role of import duties in protecting domestic industries from unfair competition.

According to him, the government uses import duties to make imported goods less attractive relative to locally produced alternatives, thereby supporting Ghanaian businesses.

"We have ways of making sure that imported goods are less attractive. And we have a way to make our local goods attractive as compared to imported goods. And that's why we slap import duty," he said.

He further noted that customs authorities carefully assess the value of imported goods to prevent undervaluation, which could allow foreign products to enter the market at artificially low prices and disadvantage local manufacturers.

"That's why the public officer assesses the true value of imported goods, so that they don't come in cheaper to compete with our local businesses and collapse them," Dr Forson explained.

He stressed that maintaining effective valuation and import duty measures remains an important component of the government's broader strategy to protect local industries while strengthening domestic revenue mobilisation.

The minister's remarks come amid ongoing public discussions on Ghana's tax policies and the government's efforts to expand revenue collection without placing undue pressure on existing taxpayers.

ANAS/MA

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