The move aims to reduce the compliance burden on micro and small businesses
The Ghana Revenue Authority (GRA) has announced an increase in the Value Added Tax (VAT) registration threshold from GH¢200,000 to GH¢750,000 per annum.
The move aims to reduce the compliance burden on micro and small businesses operating within the informal sector.
David Lartey Quarcoopome, Chief Revenue Officer of the GRA and Projects Coordinator at the Domestic Tax Revenue Division (DTRD), explained that the previous threshold had remained unchanged since 2013 and no longer reflected current economic realities.
“In real terms, that threshold had become too low, forcing very small businesses to comply with complex VAT obligations,” he noted.
He said businesses falling below the new threshold would be deregistered from VAT after verification and placed under the Modified Tax Scheme (MTS), which offers simpler compliance options.
Thomas TK Agorsor, Head of the DTRD Free Zones Office, emphasised that VAT works best with medium to large businesses that maintain proper accounting systems.
“Data shows that over 90 per cent of VAT revenue comes from top taxpayers. Removing very small businesses from VAT does not significantly reduce revenue but greatly improves efficiency,” he stated.
Under the MTS, small businesses can opt to pay either a fixed quarterly amount, a three per cent turnover tax, or a graduated tax based on simplified accounting.
