VAT Act 2025 Designed to Streamline Tax System, not Trigger Price Hikes – GRA
The Chief Revenue Officer at the Domestic Tax Revenue Division’s Free Zones Unit of the Ghana Revenue Authority (GRA), Dominic Adamnor Nartey, has dismissed concerns that the newly enacted VAT Act 2025 (Act 1151) will automatically result in higher prices for goods and services.
Mr. Nartey explained that the revised legislation is aimed at simplifying Ghana’s Value Added Tax framework rather than increasing the cost of living. His remarks come amid widespread public debate over the transition from a 4 per cent flat rate to a 20 per cent standard VAT rate, a shift that some traders fear could push up prices and reduce competitiveness.
Speaking in a media interview he stated that the introduction of Act 1151 became necessary after years of multiple amendments left the VAT regime fragmented and difficult to administer. He noted that the last major review of the VAT system was conducted in 2013, after which several changes created distortions and inconsistencies within the framework.
According to Mr. Nartey, the new Act consolidates the various amendments into a single, harmonised structure, making compliance clearer for businesses and improving tax administration. He maintained that claims linking the revised VAT structure directly to price hikes are misplaced, arguing that proper pricing methods should prevent automatic increases in the cost of goods and services.
He further addressed concerns raised by some business groups who believe VAT-registered companies may be disadvantaged compared to unregistered operators that often charge lower prices. In his view, adherence to the approved pricing guidelines ensures fairness across the system.
Beyond simplification, Mr. Nartey said the reform is also designed to eliminate tax cascading, where multiple layers of taxation inflate final prices. The streamlined framework, he added, will enhance compliance, boost efficiency, and strengthen domestic revenue mobilisation as part of broader efforts to improve Ghana’s fiscal management.
