Africa Centre for Tax Policy Research Calls for Dialogue Over New VAT Threshold, AI Rollout at Ports
The Africa Centre for Tax Policy Research (ACTOR) is urging a structured dialogue between the Ghana Union of Traders Associations (GUTA), the Ministry of Finance, and the Ghana Revenue Authority (GRA) over the government’s new VAT reforms and the planned introduction of artificial intelligence systems at the ports.
GUTA has raised concerns that the new VAT threshold of GH¢750,000 which requires businesses exceeding that turnover to pay a 20% VAT rate could create unfair competition by splitting the market between VAT-registered traders and those exempt from the tax.
But in a statement responding to these concerns, ACTOR said the new threshold is not a sudden hike but rather “a return to the long-standing real value of VAT entry points when Ghana’s volatile exchange rate is considered.”
The think tank explained that VAT thresholds, used both in Ghana and globally, are designed to protect small businesses while enabling tax authorities to focus on medium and large entities that contribute the bulk of tax revenue.
According to ACTOR, the dollar value of the threshold has remained relatively stable over the years, with the proposed GH¢750,000 equivalent to about USD 62,500 consistent with historical benchmarks. Its analysis also indicates that the actual price difference between VAT-registered and non-registered traders is modest, at roughly 1.5%.
The group further rejected GUTA’s proposal for all traders to be given the option to join the Modified Tax System (MTS), arguing that tax thresholds cannot be optional without risking systemic failures. The MTS, it emphasised, is designed strictly for micro and small businesses that fall below the VAT threshold.
Although it disagreed with several of GUTA’s claims, ACTOR acknowledged the concerns raised by traders and urged the GRA to enhance monitoring and turnover verification to curb VAT evasion.
ACTOR noted that strong collaboration among traders, policymakers and tax authorities will be essential to ensuring a smooth implementation of the reforms, minimising market distortions and strengthening trust in the country’s tax administration.
