Clement Boateng, the President of the Ghana Union of Traders Association (GUTA), has told the Ghana Revenue Authority (GRA) that the 20% Value Added Tax (VAT) is too complex for many businesses to understand and calculate.
According to the GUTA president, the GRA must restore the 4% flat Value Added Tax (VAT) rate.
GUTA argued that a simplified system would led to more compliance, particularly among traders in the informal sector.
Speaking at a press conference in Accra, GUTA President Clement Boateng stated, “Traders, especially in the informal sector, struggle with complex computation, lack the necessary expertise and cannot afford to hire VAT professionals to do the calculations and the arithmetic for them. This leads to unintentional non-compliance, penalties and a negative impact on business sustainability”.
GUTA further appealed to the GRA to suspend what they described as harassment by its task force and instead engage in dialogue with stakeholders.
Meanwhile, the Ghana Revenue Authority (GRA) has told the Abossey Okai Spare Parts Traders Association that the new Value Added Tax regime will not lead to higher consumer prices.
The Abossey Okai Spare Parts Traders Association had claimed that the new VAT framework under the Value Added Tax Act, 2025 (Act 1151), imposes an unfair burden on traders and will drive up prices.
According to the GRA, the Abossey Okai Spare Parts Traders Association’s concerns are a fundamental misunderstanding.
The VRA statement shared by Felix Kwakye Ofosu, the Minister of State in charge of Government Communications, in a post read, “The Ghana Revenue Authority (GRA) has noted with concern statements attributed to the Abossey Okai Spare Parts Traders Association suggesting that the new Value Added Tax regime under the Value Added Tax Act, 2025 (Act 1151) will lead to higher consumer prices, distort market competition, and impose an unfair burden on spare parts traders.
The GRA takes the concerns of all taxpayers seriously and remains open to constructive engagement. However, the claims made in the Association’s statement reflect a fundamental misunderstanding of how the new VAT system operates. The Authority wishes to place the following facts on record:
The change from the 4% Flat Rate to 20% will not result in increased prices
Under the Flat Rate Scheme, traders paid input VAT of 21.9% on every purchase, and that was not deductible. Under the new regime, input VAT of 20% is fully deductible as the trader can claim it back from the GRA, resulting in lower costs”.
The statement further added the benefits of the New VAT Regime to Businesses.
“Lower effective tax rate. The overall rate has been reduced from 21.9% to 20%, saving 1.9 per cent on every transaction.
• Abolition of the COVID-19 Health Recovery Levy. The 1% COVID-19 has been permanently removed, reducing the cost burden on both businesses and consumers.
Full input VAT deductibility. VAT-registered businesses can claim back the entire 20% input VAT, including the NHIL and GETFund levies, which were previously non- deductible.
Elimination of cascading taxes. The old system charged levies on top of other levies, creating a tax-on-tax effect. The new regime calculates VAT, NHIL, and GETFund on the same base, removing this hidden cost escalation.
Reduced the cost of doing business. With input VAT no longer forming part of the cost price, businesses operate on lower costs. Using the GH$500 example, the trader’s cost increases from GHc609.50 under the old system to GHç500 under the new system – a reduction of nearly 18%”.
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GUTA kicks against 20% VAT implementation; call for restoration of 4% flat rate#UTVNews pic.twitter.com/iYn5JIWnr3
— UTV Ghana (@utvghana) February 11, 2026