The Ghana Union of Traders’ Associations (GUTA) has formally called on the government to urgently review the newly enacted Value Added Tax (VAT) Act, 2025 (Act 1151) under a certificate of urgency, citing serious concerns about the law’s impact on traders and Ghana’s broader business environment. The appeal, issued by GUTA President Clement Boateng, comes amid widespread confusion and anxiety among members of Ghana’s trading community following the rollout of the revamped VAT regime.
Act 1151, which replaced the VAT flat rate scheme with a more comprehensive VAT structure, was intended to modernise the revenue system, increase compliance and expand the tax base. However, the transition has not been smooth, particularly for small and medium-scale traders who previously operated under a significantly less complex tax regime. The VAT overhaul entailed significant procedural changes, including new record-keeping requirements and an effective VAT rate that combines the standard VAT with the National Health Insurance Levy (NHIL) and the GETFund Levy, placing greater compliance burdens on traders.
GUTA’s core concerns and message to government
At the heart of GUTA’s urgent appeal is the argument that Act 1151 has not sufficiently taken into account the practical realities of Ghana’s predominantly informal trading sector. GUTA asserts that without tailored adjustments, the VAT regime could inadvertently increase the cost of doing business for traders, reduce competitiveness, and diminish consumer purchasing power as goods and services become more expensive. The association fears that the broader economy could feel the ripple effects if traders are unable to adapt effectively.
In its formal communication, GUTA is calling for several key measures:
- Immediate legislative review of Act 1151 under certificate of urgency, to allow Parliament and the executive to prioritise urgent amendments that address gaps and unintended consequences of the new VAT regime.
- Reassessment of VAT rates and transitional provisions, particularly exemptions, thresholds and compliance requirements that affect small-scale traders.
- Stronger engagement and consultation with the private sector, ensuring that traders’ concerns are fully reflected in tax policy design and implementation.
- Expanded education and operational support, including training and sensitisation to help traders comply with VAT filing systems, invoicing procedures and input VAT claims.
GUTA’s leadership maintains that without swift intervention, the new VAT framework could place unsustainable pressure on traders, discourage compliance, and undermine confidence in the tax system.
Implementation context and transitional arrangements
At the initial rollout of Act 1151, GUTA and the Ghana Revenue Authority (GRA) engaged in discussions aimed at reducing transitional difficulties. These engagements led to interim arrangements allowing traders to charge and account for an effective VAT rate inclusive of VAT, NHIL and GETFund levies during the early phase of implementation.
A joint technical team was also established to examine practical challenges, including record-keeping, invoicing standards and input VAT claims. While these efforts provided temporary relief, GUTA now believes they fall short of resolving deeper structural issues embedded in the law itself.
According to the association, legislative amendments rather than administrative adjustments alone are now required to align the VAT regime with the operational realities of traders across the country.
Economic and social implications
GUTA’s call for an urgent review goes beyond immediate business concerns. Traders form a critical pillar of Ghana’s domestic economy, supplying goods, supporting employment and sustaining household consumption. Increased tax compliance costs, if poorly managed, could translate into higher consumer prices, reduced trade volumes and job losses.
The association has warned that a rigid VAT framework could push more businesses into informal operations, weakening government revenue mobilisation efforts and widening disparities between large corporate taxpayers and small-scale traders who lack technical and financial capacity.
GUTA argues that a more flexible and inclusive VAT system would ultimately improve compliance, strengthen revenue collection and promote long-term economic stability.
The demand for a certificate of urgency review places Act 1151 squarely before policymakers. GUTA’s message is clear: meaningful legislative adjustments are needed to protect traders, maintain economic balance and ensure the VAT reform achieves its intended objectives.
How government responds in the coming weeks through amendments, relief measures or deeper stakeholder engagement — will be closely watched by the trading community and could set the tone for future tax reforms in Ghana.