Ghana losing nearly 60% of VAT revenue to inefficiencies and non-compliance – GRA

Ghana is losing close to 60 percent of its potential Value Added Tax (VAT) revenue due to systemic inefficiencies and widespread non-compliance, according to the Ghana Revenue Authority (GRA).

Thomas T. K. Agorsor, Head of the Domestic Tax Revenue Division (DTRD) Free Zones Office, disclosed this during a media engagement organised by the Ghana Ports and Harbours Authority (GPHA) on the theme: “GRA’s New VAT Reforms and Their Implications for Businesses and Consumers in 2026.”

Mr Agorsor explained that although VAT has been implemented in Ghana for about 27 years, numerous amendments over time — particularly the separation of levies from the core VAT structure — have made the system complex and difficult to comply with, thereby widening the tax gap.

He noted that the practice of charging multiple levies separately before applying VAT created a “tax-on-tax” situation, which inflated the prices of goods and services and heightened resistance to compliance among businesses.

“Because businesses were unable to reclaim input tax on these levies, they became additional costs that were eventually passed on to consumers,” he said.

According to Mr Agorsor, the comprehensive VAT reform being led by the Ministry of Finance is designed to consolidate all previous amendments into a single, clear legal framework. This, he said, would improve certainty, simplify compliance, and enhance revenue mobilisation.

He further stated that reducing the VAT compliance gap to about 20 percent could substantially boost Ghana’s tax-to-GDP ratio, which the government aims to increase from approximately 13 percent to 16 percent.

Mr Agorsor added that a review of Ghana’s broad range of tax exemptions remains critical, noting that exemptions continue to significantly erode the country’s potential tax revenue.