Ghana Raises VAT Registration Threshold to GH¢750,000 to Support Small Businesses

The Ghana Revenue Authority (GRA) has announced an increase in the Value Added Tax (VAT) registration threshold from GH¢200,000 to GH¢750,000 per annum. This significant adjustment aims to reduce the compliance burden on micro and small businesses operating in the informal sector. Chief Revenue Officer Mr. David Lartey Quarcoopome highlighted that the previous threshold had remained unchanged since 2013 and had become increasingly inadequate given current economic conditions.

Under the new regulations, businesses that fall below the revised threshold will be deregistered from VAT and transitioned to the Modified Tax Scheme (MTS), which is designed to simplify compliance. Mr. Thomas T. K. Agorsor from the GRA's DTRD Free Zones Office noted that the VAT system is more effective for medium to large enterprises that have established accounting systems. The changes are expected to enhance efficiency in tax collection while ensuring that over 90% of VAT revenue continues to be generated by larger taxpayers. Small businesses under the MTS will have the option to pay a fixed quarterly amount, a 3% turnover tax, or a graduated tax based on simplified accounting methods, thereby easing their tax obligations and promoting growth in the sector.