Case Information
- Case Name: FBC Partners Ghana Limited v. Ghana Revenue Authority
- Suit No.: GJ-CM/MISC/0378/2026
- Court: High Court of Justice, Commercial Division, Accra, Ghana
- Date of Judgment: May 5, 2026
- Judge: His Lordship Justice John-Mark Nuku Alifo
- Link: Full Ruling
Flynote
- TAXATION — Value Added Tax (VAT) — Applicable rate — Supply of immovable property — Transaction initiated and partial payment made prior to new tax regime — Seller issuing tax invoice applying increased VAT rate under new statute — Whether the applicable rate is governed by the Value Added Tax Act, 2013 (Act 870) or the Value Added Tax 2025 (Act 1151).
- STATUTE — Interpretation — Retrospective operation — Vested obligations and liabilities — Repeal of enactment — Prohibition against retrospective legislation imposing burdens — Whether the Value Added Tax 2025 (Act 1151) can retrospectively increase the tax burden on a previously accrued liability — Constitution, 1992, Art. 107(b) — Interpretation Act, 2009 (Act 792), s. 34(1)(c).
- COURTS — High Court — Jurisdiction — Tax disputes — Exhaustion of administrative remedies — Application for a private or class ruling from the Commissioner-General — Statutory interpretation of the word “may” — Whether applying for an administrative tax ruling is a mandatory condition precedent to invoking the High Court’s original jurisdiction — Revenue Administration Act, 2016 (Act 915), s. 103(1) — Constitution, 1992, Art. 140(1).
Facts
- On June 26, 2025, FBC Partners Ghana Limited (the Applicant) executed a Letter Agreement to purchase real estate from Bay Developers and Realty Limited for USD 3,000,000.
- The Applicant paid a 10% deposit of USD 300,000 in June 2025.
- At the time of this agreement and initial payment, the prevailing tax law was the Value Added Tax Act, 2013 (Act 870) as amended by Act 1107, which imposed a 5% flat VAT rate on such real estate transactions.
- The parties executed a more comprehensive sale agreement in January 2026.
- On January 1, 2026, the Value Added Tax 2025 (Act 1151) came into effect. When combined with provisions from the National Health Insurance Act (Act 852) and Ghana Education Trust Fund Act (Act 581), this raised the effective VAT rate on goods and services to 20%.
- The seller subsequently issued an invoice dated February 20, 2026, applying the new 20% VAT rate.
- The Applicant filed an originating motion seeking a High Court declaration that the applicable VAT rate was the 5% rate from the 2025 tax regime.
- The Ghana Revenue Authority (the Respondent) objected, arguing that the Applicant bypassed mandatory administrative procedures by not seeking a ruling from the Commissioner-General first. The Respondent also maintained that the 20% rate applied based on the time of supply rules under Act 1151.
Issues
- Whether the High Court has jurisdiction to entertain the application.
- Whether the Value Added Tax 2025 (Act 1151) shall take retrospective effect.
Holding
- Yes. The High Court has jurisdiction to entertain the suit; prior application to the Commissioner-General is not mandatory.
- No. The Value Added Tax 2025 (Act 1151) does not take retrospective effect to impose a higher tax burden on an obligation that accrued in 2025.
Reasoning
- Jurisdiction: Article 140(1) of the 1992 Constitution grants the High Court original jurisdiction in all matters, including civil matters. Section 103(1) of the Revenue Administrative Act 2016 (Act 915) states that a person “may” apply to the Commissioner-General for a private or class ruling. The court reasoned that the legislative use of the word “may” indicates this is a discretionary option, not a mandatory condition precedent. Where lawmakers intend a condition to be mandatory, the word “shall” is used. Therefore, the Applicant was legally permitted to bypass the Commissioner-General and invoke the court’s jurisdiction directly.
- Retrospectivity: The Applicant’s obligation to pay VAT accrued on June 26, 2025, upon the acceptance of the offer and the payment of the initial 10% deposit. At that time, both parties understood the VAT rate was 5% under Act 870. Under Section 34 of the Interpretation Act, 2009 (Act 792), the repeal of an enactment does not affect any right, privilege, obligation, or liability acquired or incurred under the repealed statute. Furthermore, Article 107(b) of the 1992 Constitution explicitly prohibits Parliament from passing retrospective laws that impose a burden, obligation, or liability on any person, unless enacted under the specific financial provisions of Articles 178 to 182. Because Act 1151 was not enacted under those specific articles, applying the 20% rate to an obligation established in June 2025 would be unconstitutional.
Disposition / Orders
The Court granted the Applicant’s application in its entirety, with no order as to costs, and made the following specific orders:
- Declared that the applicable VAT rate for the transaction is 5%, governed by the 2025 tax regime.
- Affirmed that the transaction was initiated and partly performed in June 2025, solidifying the application of the 2025 tax laws.
- Declared the tax invoice dated February 20, 2026, containing the 20% VAT rate, as void.
- Ordered the seller to issue a new VAT invoice reflecting the 5% rate in accordance with the Value Added Tax 2013 (Act 870) as amended by Act 1107.
