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Commercial court rules in favor of GRA in GHS19m tax liability case against MTN Ghana

The Commercial Division of the High Court in Accra has handed down a verdict in favor of the Ghana Revenue Authority (GRA) in a tax liability case amounting to GH¢19 million, filed against the authority by Scancom PLC, the owners of MTN Ghana.

Scancom PLC brought the case to court, contending that GRA had acted arbitrarily and erred in law by imposing the tax liability order on the company for the period spanning January 2014 to December 2017.

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In 2020, the Ghana Revenue Authority initiated a comprehensive tax audit on MTN Ghana, covering the period from January 2014 to December 2018. The audit encompassed all aspects of MTN’s business, including Input Value Added Tax claims related to goods and services procured by MTN Ghana, Value Added Tax on services imported by the company, and Input Value Added Tax claims related to office premises constructed by the telecom giant.

MTN Ghana, dissatisfied with the imposed tax liability and asserting that it had fulfilled all its tax obligations, took the matter to court seeking a reversal of the GRA order. The recent ruling has sided with the Ghana Revenue Authority in this legal dispute.

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Thus, the company requested the following reliefs:

a. An order reversing the Respondent’s decision to impose additional Value Added Tax of GHS8,793,598.00 and penalty and interest of GHS10,933,119 on imported services utilized by Appellant for its telecommunication business.

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b. An order reversing the Respondent’s decision to impose additional Ghana Education Trust Fund Levy and National Health Insurance Levy of GHC6,379,483.00 and penalty and interest of GHC2,566,124.00 on imported services utilized by the Appellant for its business.

c. An order quashing the parts of the Current Tax Assessment relating to the heads “Disputed Assessment”, and overturning the Objection Decision by Respondent as it relates to those parts.

d. Any other order(s) that the justice of the case requires.


In its ruling, the court presided over by Her Ladyship Justice Afi Agbanu Kudomor on November 9, 2023, said GRA did not err in imposing the tax liability on MTN Ghana.

Below are excerpts of the judgement:

By virtue of the combined effect of the said provision of the Value Added Tax Act, 2013 (Act 870) for imported services, Value Added Tax will not apply only if the imported services were applied in making Taxable supplies (telecommunication business). Value Added Tax will however apply if the imported services were applied in making Exempt supplies (mobile money business).

Respondent was therefore right in applying the definition in section 65 of the Value Added Tax Act, 2013 (Act 870) to the transactions concerned in determining the total cost of imported services and apportioned between the Exempt and Taxable supplies with respect to their contribution to total revenue.

Respondent therefore did not err in law and did not act arbitrarily by imposing Value Added Tax liability on the Appellant for Imported Services for the period January 2014 to December 2017 because of Appellant’s status a Partial Exempt Trader for the period of the assessment.

On the second ground of appeal, it is clear from the provisions of the two statutes as amended that the National Health Insurance (Amendment) Act, 2018 (Act 971) and the Ghana Education Trust Fund Act, 2018 (Act 972) are separate from the Value Added Tax Act 2018 (Act 870).

That, the two laws impose tax on import of service which is not subject to input tax deduction.

The two statutes levy taxes on the import of services, and these taxes are not subject to input tax deduction, regardless of the intended use of the imported service during the specified period.

For the relevant periods in 2018 (from August 2018 to December 2018), the Value Added Tax rate of 12.5% did not apply to the Appellant. However, the Ghana Educational Trust Fund Levy and National Health Insurance Levy, each at a rate of 2.5%, were applicable to the imported services by the Appellant, irrespective of whether these imported services were used to produce Taxable or Exempt supplies.

Therefore, the Respondent did not make any legal error when imposing the National Health Insurance Levy and Ghana Education Trust Fund Levy (along with interest and penalties) on the Appellant for their Imported Services from August 2018 to December 2018, regardless of whether they were applied to Taxable or Exempt services. This is why the present Tax Appeal is unsuccessful. No order is given regarding costs, and each party is responsible for its own costs.

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