The Ghana Union of Traders’ Associations (GUTA) has urged the government to adopt a fairer approach to the recently announced Value Added Tax (VAT) reforms, saying a balanced system would encourage voluntary compliance and prevent traders from being unfairly penalized.
The call comes in the wake of the 2026 Budget where the Finance Minister outlined a bold package of VAT reforms aimed at making Ghana’s tax system fairer, simpler, and more efficient.
Measures include raising the VAT registration threshold from GH¢200,000 to GH¢750,000, reducing the effective VAT rate from 21.9% to 20%, abolishing the COVID-19 Health Recovery Levy, and extending zero-rating on locally manufactured textiles to 2028. The government said these reforms are designed to ease the burden on small businesses, promote compliance, support domestic industry, and stimulate economic growth.
Despite these policy intentions, GUTA says some reforms could have unintended consequences for traders, particularly small and medium enterprises (SMEs). The union highlighted that the current VAT threshold could create unequal treatment among traders.
“The new VAT threshold creates a situation where two traders dealing in the same commodity line in the same marketplace are treated differently,” the Union said in a statement.
Traders whose turnover exceeds GH¢750,000 are required to charge 20% VAT, while those below the threshold remain exempt, potentially skewing competition as customers gravitate toward cheaper goods. Traders previously on the 4% flat VAT rate are especially affected, as even small daily excesses beyond the GH¢25.00 exemption now trigger the standard 20% VAT regime, possibly increasing prices for consumers and reducing sales for affected traders.
To address these challenges, GUTA is calling for a modified VAT system that ensures fair treatment and parity, encouraging voluntary compliance across the market. In its statement, the union said: “To promote compliance and fairness, GUTA urges the government to allow traders to opt for a modified tax system that ensures parity.”
GUTA also welcomed the government’s plan to introduce Artificial Intelligence (AI) at the ports, but emphasized that tax rationalization must come first. Without addressing the current tax burdens, technological improvements alone may not relieve traders’ challenges. As the union stated:
“We support the adoption of technology that improves trade facilitation. However, we reiterate our request that all taxes at the port be rationalised before the implementation of AI systems, as promised.”
The union reaffirmed its commitment to working with the government to ensure that VAT reforms meet their goals without harming traders’ livelihoods. GUTA stressed that voluntary compliance, fair treatment, and a level playing field are critical to helping traders thrive while supporting Ghana’s broader economic growth.
