GUTA Demands Suspension of VAT Act 1151
The Ghana Union of Traders’ Associations (GUTA) has called for the immediate suspension and review of the Value Added Tax (VAT) Act 1151, warning of possible industrial action if government fails to address concerns over its implementation.
At a press conference in Accra on Wednesday, 11 February 2026, GUTA President Clement Boateng described the current VAT regime as burdensome and ill-suited to the realities of the informal sector, which constitutes a significant portion of Ghana’s economy.
According to the Association, many of its members fall below the input threshold under the revised VAT structure, a situation it says has resulted in higher costs and rising prices. GUTA maintains that the complexity of the prevailing system has made compliance difficult for small-scale traders, importers and retailers.
“We are calling on the government to review the VAT Act 1151 urgently. The status quo must be restored to a 3% to 4% flat rate for the informal sector,” Boateng stated. “This is the only way to make compliance easy and realistic for the average trader.”
Mr Boateng, who chaired the meeting, argued that simplicity is critical to improving tax compliance within the informal sector. He contended that the standard rate system is administratively demanding and has inadvertently created tension between traders and officials of the Ghana Revenue Authority (GRA).
GUTA further warned that without a review of the law, dissatisfaction among traders could escalate into broader action. The Association insists that the reintroduction of a flat rate system would reduce friction, enhance transparency and promote voluntary compliance.
Rather than imposing additional burdens on already compliant businesses, GUTA is urging the GRA to prioritise broadening the tax base. The Association believes that expanding the number of registered taxpayers would generate more sustainable revenue than increasing pressure on a limited pool of traders.
“GRA should intensify trader registration and education to broaden the tax net and increase revenue,” Boateng urged. “Instead of over-taxing the few who are already compliant, let us find the thousands who are outside the system.”
The Union also proposed the introduction of incentives to encourage voluntary VAT registration, arguing that a supportive approach would yield better results than punitive enforcement.
“Introduce incentives for shops and retail outlets to mandatorily register and pay VAT. When you broaden the tax base through incentives, the burden on the individual trader lessens, and national revenue naturally climbs,” the GUTA President added.
GUTA says it remains open to dialogue but expects swift action from government to avert what it describes as growing frustration within the trading community.
