The Ghana Union of Traders Association (GUTA) has welcomed the government’s planned overhaul of the Value Added Tax (VAT) system, describing Finance Minister Dr. Cassiel Ato Forson’s announcement as a step toward easing the tax burden on businesses.
Dr. Forson, in his mid-year budget presentation, confirmed that a new VAT reform bill will be tabled in Parliament in October 2025 to scrap the COVID-19 Health Recovery Levy, merge multiple levies into a streamlined structure, and simplify compliance for businesses.
GUTA President Dr. Joseph Obeng said the reforms align with long-standing demands by traders for a less complex and more affordable VAT regime. “The removal of the COVID levy and integration of the straight-line levy into the standard rate will make VAT easier to understand and comply with,” he noted.
However, GUTA is urging policymakers to address traders’ operational realities. Dr. Obeng expressed concern over the proposed abolition of the VAT flat rate scheme, which he described as a practical solution for traders who struggle to claim input VAT because their suppliers, especially in cross-border trade with Nigeria and Dubai are not VAT-registered.
He also warned that raising the VAT registration threshold could create uneven competition in key trading hubs. “Two traders selling the same goods in Opera Square or Abossey Okai should not face different tax obligations simply because one is exempt. This would hurt compliance and unfairly penalise registered businesses,” he said, calling for the removal of thresholds in concentrated wholesale and retail markets.
GUTA is proposing a dual system that retains the flat rate alongside the standard VAT, while ensuring all traders in high-density markets are treated equally.
Dr. Obeng emphasised that GUTA supports the Finance Minister’s intention to simplify VAT administration but urged continued stakeholder engagement. “A simplified VAT system must not come at the expense of fairness or practicality. We need reforms that protect traders’ competitiveness and sustain government revenue mobilisation,” he added.
The upcoming VAT reform bill is expected to be a cornerstone of the government’s efforts to modernise tax administration, improve compliance, and support private-sector growth in the post-COVID economy.
