The Ghana Union of Traders Association (GUTA) has urged the government to reinstate a 4% flat Value Added Tax (VAT) rate, arguing that a simplified system would boost compliance, particularly among informal sector traders.
GUTA said the current 20% VAT regime is too complicated for many businesses to calculate and implement, making compliance challenging despite assurances from the Ghana Revenue Authority (GRA) that the rate would not increase consumer prices or disrupt market activity.
Speaking at a press conference in Accra, GUTA President Clement Boateng appealed to the GRA to halt what he described as harassment by its task force and instead engage stakeholders in meaningful dialogue.
“Traders, especially in the informal sector, struggle with complex computations, lack the expertise, and cannot afford to hire VAT professionals to handle the calculations for them. This often leads to unintentional non-compliance, penalties, and negative impacts on business sustainability,” he said.
GUTA is calling for an urgent review of Act 1151 and proposes a return to a simplified 3% to 4% flat VAT system for informal sector operators, making compliance easier and reducing administrative burdens.
The association emphasized that a flat VAT rate would strengthen business operations, enhance revenue collection, and protect small traders from inadvertent violations of tax law.
