GRA raises VAT registration threshold to ease burden on small businesses

The Ghana Revenue Authority (GRA) has announced a significant increase in the Value Added Tax (VAT) registration threshold, raising it from GH¢200,000 to GH¢750,000 in annual turnover.

The adjustment is intended to ease the compliance burden on micro and small enterprises, particularly those operating within the informal sector.

David Lartey Quarcoopome, Chief Revenue Officer of the GRA and Projects Coordinator at the Domestic Tax Revenue Division (DTRD), said the previous threshold, which had been in place since 2013, no longer reflected prevailing economic conditions.

“In practical terms, the old threshold had become too low, compelling very small businesses to meet complex VAT requirements,” he explained.

Mr Quarcoopome noted that businesses earning below the new threshold will, after verification, be deregistered from the VAT system and migrated onto the Modified Tax Scheme (MTS), which offers a simpler tax compliance framework.

Supporting the move, Thomas T.K. Agorsor, Head of the DTRD Free Zones Office, said VAT administration is more effective when applied to medium and large-scale businesses with proper accounting structures.

“Available data shows that more than 90 per cent of VAT revenue comes from top taxpayers. Excluding very small businesses from VAT has minimal impact on revenue but significantly improves administrative efficiency,” he said.

Under the Modified Tax Scheme, small businesses may choose to pay taxes through a fixed quarterly amount, a three per cent tax on turnover, or a graduated tax rate based on simplified records.