In a significant move to bring more informal sector workers into the national tax net, the Ghana Revenue Authority (GRA) will from July 1 roll out a modified taxation system tailored specifically for individuals earning annual sales of less than GHS 500,000.
The new tax model, announced during the launch of a report on informal sector tax compliance in Accra, introduces fixed quarterly tax payments ranging from GHS 25 to GHS 45 for those earning below GHS 20,000 annually. For those earning between GHS 20,000 and GHS 500,000, a flat rate of 3% tax on turnover will be applied.
GRA’s Assistant Commissioner for Research and Policy, Dr. Alex Kombat, said the initiative is designed to simplify tax obligations for low-income earners and enhance fairness and efficiency in domestic revenue mobilisation.
“The modified tax system is a strategic shift from conventional approaches. It recognises the realities of the informal sector and offers a more flexible and predictable tax structure,” Dr. Kombat explained.
The announcement came during the launch of a research report by BudgIT Ghana, in partnership with the Society for Women in Taxation Ghana and the International Budget Partnership (IBP). The report, titled “Ghana’s Untapped Economy”, explores tax behaviour in Greater Accra’s informal economy and offers recommendations to improve compliance.
Jennifer Moffatt, Country Manager for BudgIT Ghana, underscored the need for closer collaboration between GRA and local governments, noting that many informal workers tend to trust their Metropolitan, Municipal, and District Assemblies (MMDAs) more than the central tax authority.
“People in the informal sector often interact more frequently with local authorities. Partnering with MMDAs could make tax payment more accessible and less intimidating,” she said.
The Chairperson of the Society for Women in Taxation, Esi Sam, welcomed the policy, describing it as a practical tool for fostering voluntary compliance.
“Making taxes simple and understandable will go a long way in encouraging informal workers to comply. This modified approach is a step in the right direction,” she remarked.
As Ghana continues efforts to formalise its vast informal economy, the modified tax regime is seen as a potential game-changer that could improve revenue collection without burdening low-income earners or small traders.
