Amazon Web Services (AWS) will implement a 21% tax on cloud services for customers in Ghana starting March 1, 2025. The tax will drive up operational costs for Ghanaian startups that depend on the global cloud service provider to store sensitive data and power essential digital operations.
This tax comprises a 15% Value Added Tax (VAT) and an additional 6% in levies, including the National Health Insurance Levy, the Ghana Education Trust Fund Levy, and the COVID-19 Health Recovery Levy, AWS said in a notice to customers seen by TechCabal.
The introduction of the tax could place Ghanaian startups at a competitive disadvantage compared to counterparts in regions with more favorable financial conditions for cloud adoption. In January 2023, AWS announced that it will now accept payments in Naira, alongside seven other local currencies, to help customers avoid foreign exchange costs and payment friction.
Ghana’s broader tax landscape has long posed challenges for startups, with multiple levies and compliance costs affecting business operations. In 2023, Ghana’s parliament introduced new taxes for individuals and businesses as part of measures to reset the economy months after increasing its VAT from 12.5% to 15%. For startups relying heavily on digital infrastructure, like cloud services, these financial pressures can slow product development and market entry.
AWS’s new tax could also push Ghanaian startups to explore alternative cloud providers or on-premises infrastructure solutions, potentially slowing down their growth and innovation cycles.
Despite these challenges, forecasts suggest resilience in the market. Ghana’s public cloud sector is projected to reach $306.10m in revenue in 2025, according to Statista. Ghana, home to hundreds of startups, has built a vibrant startup ecosystem that depends heavily on affordable cloud services for development and deployment. However, the new AWS tax threatens to undermine the affordability of these critical services.
