Abstract

Electronic commerce (e-commerce) businesses have become a common mode of transaction in Ghana. However, Ghana Revenue Authority (GRA) has struggled to assess and maximise its revenue potential due to technical challenges and the complex nature of the market. The main objective of this research was therefore to identify the entities, goods and services involved in online transactions and estimate the total monetary value and revenue potential of online transactions in Ghana. To achieve this, both qualitative and quantitative research methodologies were adopted. The study found that resident and non-resident entities constitute 19 per cent and 81 per cent, respectively of those entities engaged in e-commerce activities in Ghana. Further, it was found that about 20 per cent of students, 45 per cent of people in formal employment, 30 per cent of the self-employed and five per cent of the unemployed are engaged in e-commerce. In addition, it appears that groceries constitute 47.5 per cent of all goods traded online with the rest of the goods constituting 52.5 per cent. Again, as many as 31 per cent of the e-commerce businesses identified in this study had not registered with GRA. Of those registered with GRA, 45 per cent had not filed their corporate income tax (CIT) or personal income tax (PIT). Thirty-eight per cent had not filed their value added tax (VAT), 28 per cent had not filed or paid their pay-as- you-earn (PAYE) and 72.4 per cent of the businesses did not withhold taxes. The paper recommends creating a database for all e-commerce businesses, including those with resident and non-resident status. The estimated revenue potential for e-commerce transactions by resident persons across all types of tax is over GHȻ 1.39 billion.