The Ghana Union of Traders’ Associations (GUTA) has mounted strong opposition to the government’s new Value Added Tax regime under Act 1151, warning that its implementation could drive up consumer prices, stifle small businesses and trigger job losses if urgent reforms are not made.
Addressing a press conference in Accra on Wednesday, GUTA President Clement Boateng said the trading community is deeply concerned about the impact of the new VAT structure, describing it as complex, burdensome and ill-suited for Ghana’s largely informal business sector.
“This regime poses significant challenges to the trading community, and if not addressed urgently, will negatively impact business operations, leading to increased costs for consumers and potential job losses,” Boateng told journalists.
Mr.Boateng disclosed that prior to the government’s presentation of the 2026 budget to Parliament, GUTA had submitted recommendations at the government’s request, particularly cautioning against the abolition of the VAT flat rate scheme. However, he said those concerns were not incorporated into the final policy framework.
Following the budget presentation, GUTA representatives met with officials of the Ghana Revenue Authority (GRA) to discuss implementation challenges. According to Boateng, both parties agreed to roll out education and sensitization programs and to form a technical committee to address concerns raised by traders.
He accused the GRA of failing to honor that agreement.
“Despite our efforts, the GRA has not respected the resolutions. Instead, they have formed a task force to harass and coerce traders into submission,” Boateng said, adding that the move undermined plans to issue a joint press statement outlining agreed steps forward.
At the heart of the dispute is the structure of the new VAT regime, which requires input and output tax calculations that GUTA argues are too complicated for many traders, particularly those operating in the informal sector.
The GRA has maintained that VAT is a consumption tax ultimately borne by the final consumer. But Mr. Boateng said that position is problematic at a time when consumers are demanding price reductions amid what he described as stable macroeconomic indicators.
“We expected a tax-friendly VAT that broadens the tax base, not a regime that burdens traders with complex calculations, paperwork and price effects,” he said.
GUTA’s regional and sectoral engagements with its members, Mr. Boateng added, reveal widespread opposition to the new system and growing frustration among small and medium-sized enterprises.
While Ghana’s tax-to-GDP ratio is often cited as one of the lowest in the subregion, Mr. Boateng argued that the problem lies not in unwillingness to pay taxes but in the complexity of the tax system.
“Traders, especially in the informal sector, struggle with complex computations, lack the necessary expertise and cannot afford to hire VAT professionals,” he said. “This leads to unintentional non-compliance, penalties and a negative impact on business sustainability.”
GUTA reiterated its support for tax compliance and acknowledged the government’s need to mobilize domestic revenue for development. However, the association is calling for urgent revisions to Act 1151.
Among its proposals is an immediate review of the law to introduce a simplified 3% to 4% VAT flat rate for the informal sector, similar to the previous status quo, to ease compliance.
The association also urged the GRA to intensify trader registration and public education campaigns to broaden the tax net and increase revenue collection.
Additionally, GUTA proposed making the new VAT regime optional for traders who are comfortable with electronic services and detailed accounting systems, allowing businesses to choose the model that best suits their operations.
Mr. Boateng further called for incentives to encourage shops and retail outlets to register and collect VAT mandatorily, while urging consumers to demand VAT receipts after every purchase to enhance transparency and revenue mobilization.
“We are not against paying taxes,” he said. “We are asking for a simplified and inclusive system that supports business growth while enabling government to raise the revenue it needs.”
As tensions simmer between traders and tax authorities, the coming weeks are likely to test the government’s willingness to revisit the new VAT framework amid mounting pressure from one of the country’s most influential business groups.
By Kingsley Asiedu
