Ghana’s trading community is on edge as the Ghana Union of Traders Association (GUTA) today publicly condemned the rollout of the Value Added Tax Act, 2025 (Act 1151), insisting that the replacement of the familiar 4% flat-rate VAT with a standard 20% regime is inflicting unnecessary hardship on businesses and inflating consumer prices across the country.
In a strongly worded address delivered this morning at the GUTA secretariat in Accra, President Clement Boateng painted a picture of widespread distress among traders, especially those in the informal sector who dominate retail commerce. He argued that the new system’s demand for intricate input-output VAT computations, coupled with heavy record-keeping requirements, has proven far too complicated for the average trader. Many operators, he said, simply do not possess the accounting skills or the money to engage professionals, leaving them vulnerable to accidental breaches of the rules, steep fines and, ultimately, the risk of business closure.
Boateng reported that feedback gathered from traders across different regions and industry groups shows almost unanimous disapproval of the current setup. To underline the immediate economic fallout, he offered a clear side-by-side comparison: under the old flat-rate arrangement, a GH¢1,000 item attracted GH¢40 in VAT, resulting in a customer price of GH¢1,040. Applying the new 20% rate lifts the same item to GH¢1,200, a jump that has caused numerous buyers to refuse transactions as soon as traders produce the updated VAT receipt. In light of this, GUTA has instructed members to keep their existing VAT booklets and not hand them over until a workable compromise is secured.
The association levelled sharp criticism at the Ghana Revenue Authority (GRA), accusing it of abandoning the collaborative path previously agreed upon. Boateng reminded the audience that earlier meetings had produced consensus on nationwide sensitisation efforts and the formation of a joint technical committee to address rollout problems. Rather than honouring those undertakings, he charged, GRA has instead unleashed a task force that is intimidating traders and forcing compliance through pressure rather than partnership—a development he described as deeply regrettable and counterproductive.
GUTA reiterated its commitment to responsible tax payment and acknowledged the government’s legitimate need for revenue to drive national progress. Even so, the union branded the present framework an “obnoxious tax” that unfairly penalises both sellers and everyday buyers. To correct course, GUTA is pressing for rapid legislative review of Act 1151 and the reintroduction of a straightforward 3–4% flat-rate option tailored to the informal sector, which would greatly simplify compliance. The group also urged GRA to accelerate trader registration campaigns and invest heavily in public education so that more enterprises can join the formal tax system voluntarily and revenue can grow sustainably.
Among other proposals, GUTA suggested allowing traders the choice of sticking with the current GVAT framework or moving to the new 20% structure, depending on what suits their operations best. It further recommended that GRA roll out targeted incentives to motivate more retail shops to register and issue VAT invoices, while simultaneously running nationwide campaigns to encourage shoppers to always request receipts, thereby capturing additional revenue through increased compliance at the point of sale.
At the heart of today’s message was a firm demand: GRA must cease all coercive tactics, withdraw the enforcement task force and resume serious, respectful negotiations aimed at fixing the genuine difficulties the new law has created. Boateng closed his remarks with a resolute affirmation of the traders’ determination, proclaiming “Puta our business!” to signal that the association stands ready to protect members’ livelihoods by any legitimate means necessary.
The press conference arrived just twenty-four hours after GRA issued its own statement addressing parallel grievances raised by the Abossey Okai Spare Parts Traders Association. In that document, GRA attributed much of the current outcry to a basic misreading of the reform’s mechanics. The Authority maintained that when registered traders properly claim back the input VAT they pay on purchases—a facility now fully available—the net cost of stock drops substantially, which in turn allows final selling prices to consumers to fall below what prevailed under the old regime.
To prove the point, GRA presented a worked illustration based on a GH¢500 wholesale cost and a 20% profit margin. Under the previous flat-rate rules the consumer ended up paying GH¢760.66; under the new rules the same item reaches the buyer at GH¢720—a meaningful reduction of over GH¢40 per unit. GRA attributed this advantage to the full recoverability of the 20% input VAT, the permanent scrapping of the 1% COVID-19 Health Recovery Levy, and the removal of layered tax-on-tax burdens that quietly inflated costs in the past.
The Authority went on to outline broader advantages flowing from the changes: an overall reduction in the effective tax load from 21.9% to 20%, complete deductibility of National Health Insurance Levy and GETFund contributions, a significantly higher registration threshold of GH¢750,000 that spares micro-businesses from VAT paperwork, and the creation of a single, transparent compliance regime for everyone registered.
GRA confirmed that a joint technical working group with GUTA is already operational, providing practical training on record maintenance, input tax recovery and accurate pricing during the adjustment period. The Authority invited other trade bodies to take advantage of similar assistance and appealed for continued constructive dialogue so that Ghanaian businesses can reap the full intended benefits of the modernisation effort.
With both the traders’ union and the revenue agency expressing openness to further talks, many observers now hope that focused discussions and targeted refinements can close the gap between policy intent and on-the-ground reality, delivering a tax framework that strengthens public finances without undermining the vitality of one of Ghana’s most important economic pillars.