The Ghana Union of Traders’ Associations (GUTA) has challenged claims by the Ghana Revenue Authority (GRA) that the 2025 VAT reforms under Act 1151 will reduce costs for consumers.
GRA had earlier assured traders and the public that moving from the old 4% flat rate to a 20% standard rate would ultimately make goods cheaper. The authority explained that under the new system, traders can now reclaim input VAT on their stock, something that was not possible under the old regime, effectively removing hidden taxes that previously inflated prices.
Despite these assurances, GUTA insists the practical reality is different. Addressing the media on Wednesday, GUTA President Clement Boateng warned that small traders, who form the bulk of Ghana’s informal sector, still face complex procedures, high compliance costs, and potential cash-flow pressures under the new VAT regime.
“We are calling on the government to review VAT Act 1151 urgently. The status quo must be restored to a 3–4% flat rate for the informal sector,” Boateng said. “This is the only way to make compliance easy and realistic for the average trader.”
The union argued that most small-scale traders fall below the input threshold, making it difficult to benefit from input VAT refunds. They also warned that the complexity of filing and claiming refunds could lead to unintentional errors, penalties, and ultimately, higher prices for consumers.
GUTA further challenged the GRA to engage more directly with traders on the ground:
“GRA should intensify trader registration and education to broaden the tax net and increase revenue. Instead of over-taxing the few who are already compliant, let us find the thousands who are outside the system,” Boateng said.
The union also proposed that VAT registration be made attractive through incentives rather than being purely punitive. According to GUTA, broadening the tax base in this way would ease pressure on individual traders while still increasing government revenue.
While GRA maintains that VAT 1151 removes hidden taxes and lowers the final price for consumers, traders insist that the practical challenges make the law a heavy burden on the informal sector, creating friction and financial strain.
