Government slaps foreign Universities with 21.90 percent tax ….Ghanaian students bear brunt

The government of Ghana is essentially shutting down the door on higher education for Ghanaian students who are based in the country but pursuing courses offered foreign universities through online platforms by slapping them with a whopping 21.90percent tax.

What this means is that, students will have to pay more in terms fees to acquired acknowledge and certificates some of which had been denied them by the Ghanaian institutions for reasons, including the absence of such programmes, rigorous entry requirements, lack of expertise, inflexibility of the Ghanaian educational programmes and non-availability of infrastructure.

Some of the universities have told their continuing students, as well as new students through emails about the new charges after having registered with the Ghana Revenue Authority (GRA) for the collection of VAT (Value Added Tax) and the levies.

One of these foreign institutions is the University of London. It gave the breakdown as Value Added Tax (15%), National Health Insurance Levy (NHIL) 2.5% and Ghana Educational Trust Fund Levy (GETFL) 2.5% and COVID 19 Health Recovery Levy (CHRL) 1%.

The plight of the students already are worsened by instability in the local currency as most of these schools charge their fees in foreign currencies particularly the pound sterling and the US dollar, and having to pay additional 21.90percent on the fees as VAT and other levies.

The school explained that “the VAT and levies apply to services bought online for which online education falls within this definition”, adding “as a consequence of this legislation in Ghana, the University will be required to add the levies and then the VAT, to what will be an effective rate of 21.90% to new and continuing students resident in Ghana on all payments made from 20 June 2023”.

“We understand that this tax will be an unplanned additional cost for you to bear and so we are writing to you to provide advanced notification of changes to programme fees. We review our programme fees regularly in line with our terms and conditions. In this instance, we have to pass on a statutory charge over which we have no control.

“The breakdown of the 21.90% by VAT and each levy will appear against each fee charged on your student record. Please note that the VAT and levies are subject to change.

It is not clear, what arrangement pertains to the foreign universities with campuses in Ghana, but it is suspected that they are regarded as business entities providing services hence required to pay VAT and other levies. These are automatically passed onto their Ghanaian students in fees.

Below is the message University of London sent to one of its students on the new charges

Dear ……

We are writing to notify you about a change to our fees for students in Ghana from 20 June 2023.

In order to be compliant with Ghanaian law, the University of London, has registered with the Ghana Revenue Authority for the collection of VAT (Value Added Tax) and the following levies

· Value Added Tax (15%)

· National Health Insurance Levy (NHIL) 2.5%

· Ghana Educational Trust Fund Levy (GETFL) 2.5%

· Covid 19 Health Recovery Levy (CHRL) 1%

The VAT and levies apply to services bought online for which online education falls within this definition.

As a consequence of this legislation in Ghana, the University will be required to add the levies and then the VAT, to what will be an effective rate of 21.90percent to new and continuing students resident in Ghana on all payments made from 20 June 2023.

We understand that this tax will be an unplanned additional cost for you to bear and so we are writing to you to provide advanced notification of changes to programme fees. We review our programme fees regularly in line with our terms and conditions. In this instance, we have to pass on a statutory charge over which we have no control.

The breakdown of the 21.90% by VAT and each levy will appear against each fee charged on your student record. Please note that the VAT and levies are subject to change.