The Ghana Union of Traders’ Associations (GUTA) is pushing for a rethink of Ghana’s VAT rules, suggesting an approach that rewards compliance instead of punishing it. Their bold proposal could ease the strain on small traders while boosting national revenue.
At a press conference on Wednesday, GUTA President Clement Boateng didn’t hold back. Rather than penalizing those who are already trying to follow the rules, he called for positive incentives to make VAT registration and payment appealing.
“Introduce incentives for shops and retail outlets to mandatorily register and pay VAT. When you broaden the tax base through incentives, the burden on the individual trader lessens, and national revenue naturally climbs,” Boateng said.
The union argues that the current VAT Act 1151 hits small-scale traders hardest, especially those below the input threshold. Many are drowning in paperwork and complex rules, which leads to confusion, accidental tax evasion, and tense encounters with tax officials.
GUTA says an incentive-driven system could solve this problem in two ways: make tax compliance realistic for the informal sector, which powers much of Ghana’s economy, and expand the overall tax net. “Instead of over-taxing the few who are already compliant, let us find the thousands who are outside the system,” Boateng added, urging GRA officials to get out of their offices and see what traders face on the ground.
The union envisions rewards that could range from tax credits to simpler filing processes, or even preferential access to government programs. The idea is to make VAT less of a burden and more of an opportunity, turning reluctant compliance into a win-win for traders and the state.
GUTA’s proposals arrive as concerns grow over the current standard VAT rate, which according to GUTA would squeeze small businesses. A flexible, incentive-based approach, the union argues, could ease those pressures while bringing more people into the tax system.
