Ghana Revenue Authority Increases VAT Registration Threshold to Support Small Businesses

The Ghana Revenue Authority (GRA) has announced a significant increase in the Value Added Tax (VAT) registration threshold, raising it from GH¢200,000 to GH¢750,000 per annum. This adjustment aims to alleviate the compliance burden on micro and small businesses operating in the informal sector. GRA's Chief Revenue Officer, David Lartey Quarcoopome, stated that the previous threshold had remained unchanged since 2013 and was no longer reflective of current economic conditions. As a result of this change, businesses that fall below the new threshold will be deregistered from VAT and transitioned to the Modified Tax Scheme (MTS), which offers simpler compliance options. Notably, over 90% of VAT revenue is generated from larger businesses, suggesting that this move will not significantly impact overall tax revenue while enhancing efficiency for smaller enterprises. Under the MTS, small businesses can select from various payment options, including fixed quarterly payments, a 3% turnover tax, or a simplified graduated tax, thereby facilitating easier compliance with tax obligations.