MTN Ghana’s efforts were to have the tax liability order reversed, but the GRA’s decision was upheld by the court.
The Commercial Division of the High Court in Accra has handed down a GH19 million judgment in favor of the Ghana Revenue Authority (GRA) in the tax liability case against Scancom PLC, the owner of MTN Ghana.
The case concerned the period from January 2014 to December 2017, when GRA imposed tax liability on MTN Ghana.
Scancom had challenged the imposition, claiming that the GRA had made mistakes and acted arbitrarily. The court, on the other hand, sided with the GRA, ruling that the imposition was lawful and not arbitrary.
The court emphasized that the GRA correctly applied the definition in Section 65 of the Value Added Tax Act to determine the total cost of imported services and classified them as exempt or taxable based on their contribution to total revenue. As a result of its status as a partially exempt trader, the imposition of value-added tax liability on MTN Ghana for the specified period was deemed justified.
Concerning the second ground of appeal, the court stated that the National Health Insurance (Amendment) Act of 2018 (Act 971) and the Ghana Education Trust Fund Act of 2018 (Act 972) were distinct from the Value Added Tax Act of 2018 (Act 870). Regardless of the purpose of the imported services during the relevant period in 2018, these laws imposed a tax on the import of services that were not subject to input tax deduction.
Finally, the court ruled that the GRA did not commit an error in levying the National Health Insurance Levy and the Ghana Education Trust Fund Levy, as well as interest and penalties, on MTN Ghana for imported services from August 2018 to December 2018, regardless of whether they applied to taxable or exempt services.
MTN Ghana’s tax appeal was dismissed, and no costs were awarded to either party.