Tax experts and stakeholders are pushing back against government plans to abolish Ghana’s Value Added Tax (VAT) Flat Rate Scheme, arguing that refining the system—not scrapping it—would better serve both taxpayers and administrators.
At a national dialogue on VAT reforms convened in Accra by the Ghana Integrity Initiative (GII), Mr. Abeku Gyan-Quansah, Director for Tax and Legal Services at PwC, strongly advocated for the restoration of the repealed VAT Act 810 of 2010. That legislation allowed wholesalers and retailers within a specified turnover range to be taxed under a simplified flat rate—a system many traders reportedly found manageable and effective.
According to Mr. Gyan-Quansah, the flat rate mechanism had gained popularity in local markets due to its simplicity and ease of compliance. He warned that abandoning it could complicate VAT administration, increase compliance burdens on small businesses, and reduce monitoring efficiency.
“Reinstating aspects of the old Act could significantly enhance compliance while making the system easier to administer. The flat rate brought clarity and predictability to many informal sector actors,” he noted.
His comments come in response to recent policy announcements by Finance Minister Dr. Cassiel Ato Forson, who in March proposed eliminating the VAT Flat Rate Scheme and raising the VAT registration threshold as part of broader reforms to simplify the tax system and shield smaller businesses from tax pressures.
However, critics argue that the government must first clarify the long-term objectives of the reforms, especially regarding equity and efficiency in tax policy.
Mr. Daniel Nuer, Head of the Tax Policy Unit at the Ministry of Finance, revealed that efforts were underway to consolidate fragmented tax legislation into a unified legal framework—an initiative aimed at improving clarity and enforcement.
Adding to the debate, Mr. Kingsley Konadu, Assistant Commissioner of Tax Audit Quality Assurance at the Ghana Revenue Authority, proposed a review of the VAT registration threshold itself. He highlighted that 97% of VAT revenues come from businesses with annual turnover above GHS1 million, implying that increasing the current GHS200,000 threshold would have little impact on revenue but would ease compliance for microenterprises.
The event, held under the theme “Value Added Tax (VAT) Reforms in Ghana: Addressing Structural, Legal and Policy Gaps,” brought together policymakers, private sector players, and civil society advocates, all united in the belief that tax reforms must be inclusive, transparent, and responsive to the needs of Ghana’s evolving economy.
