GRA begins new tax regime for informal businesses with fixed-rate payments

The Ghana Revenue Authority (GRA) has begun implementing a modified tax regime aimed at drawing more informal sector businesses into the tax net, as part of broader reforms to improve revenue mobilisation.

Speaking on Citi FM’s Breakfast Show on Tuesday, July 1, 2025, Assistant Commissioner and Head of Research and Policy at the GRA, Dr Alex Kombat, said the new system applies simplified tax bands to both regulated and unregulated informal businesses based on their annual turnover.

“For informal taxpayers with turnover between $20,000 and $500,000, they will pay a flat rate of 3 per cent on their turnover,” Dr Kombat explained.

“For those below $20,000, we’ve introduced fixed quarterly payments ranging from GH¢25,000 to GH¢45,000, depending on income level.”

The revised regime, which takes effect today, forms part of a broader set of tax measures taking hold in the second half of the year.

These include a 15 per cent VAT on non-life insurance premiums and a FIVE per cent excise tax on domestically produced plastic items.

Addressing concerns about taxing businesses earning as little as $10,000 annually, Dr Kombat said it was a matter of fairness. “Everyone who earns income should contribute to national development. Large businesses already do, so it’s only right that the informal sector is also included.”

Under the new structure, businesses earning between $10,000 and $15,000 annually will pay a quarterly tax of GH¢35,000. Those earning between $5,000 and $10,000 are expected to pay GH¢25,000.

According to the GRA, these fixed rates will help bring order and predictability to a sector long seen as difficult to tax.

Dr Kombat said the changes are not a new policy, but a continuation of plans delayed by the COVID-19 pandemic.

“We suspended tax stamps during the pandemic, but since 2021, we have been engaging stakeholders. After nearly three years of dialogue, we are ready to proceed,” he said.

Some analysts and civil society groups have expressed concern about the possible burden on smaller operators, especially those not formally registered or with low profit margins.

But Dr Kombat maintains that expanding the tax base is necessary to reduce imbalances in the national revenue structure.

The GRA says the modified system is supported by law, including the VAT Amendment Act, 2025 (Act 1133), and the Excise Duty Amendment Act Number Two of 2023 (Act 1108), which provide the legal basis for the changes taking effect today.