GUTA calls for return to 4% flat VAT to ease compliance

The Ghana Union of Traders Association (GUTA) has called on the government to reinstate the 4% flat Value Added Tax (VAT) rate, arguing that a simplified system would enhance compliance, particularly within the informal sector.

The association maintains that the current 20% VAT regime is overly complex for many small businesses, making it difficult for traders to properly calculate and comply with tax obligations.

The appeal comes despite assurances from the Ghana Revenue Authority (GRA) that the revised VAT rate will not lead to price hikes or disrupt market activity.

Addressing a press conference in Accra, GUTA President Clement Boateng urged the GRA to suspend what he described as harassment by its task force and instead prioritise engagement and dialogue with stakeholders.

He explained that many informal sector operators lack the expertise to manage complicated VAT computations and cannot afford to hire professionals to handle tax calculations on their behalf. According to him, this often results in unintentional non-compliance, penalties, and added pressure on already struggling businesses.

GUTA is therefore advocating an urgent review of Act 1151 and proposing a return to a simplified flat VAT rate of between 3% and 4% for informal sector operators to make compliance more practical and sustainable.