Starting July 1, the Ghana Revenue Authority (GRA) will introduce a simplified tax system to increase compliance and expand revenue collection from the informal sector.
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Under the new system, informal workers not registered with the GRA, but earning less than GHS 20,000 annually, will pay a fixed quarterly tax ranging from GHS 25 to GHS 45.
At the launch of the final report on “Ghana’s Untapped Economy”, Dr. Alex Kombat, Assistant Commissioner for Research and Policy at GRA, explained the need for reform. He said the modified system would help widen the tax base and make revenue mobilization more equitable.
“We’ve introduced a system called modified taxation. If your turnover is below GHS 20,000, you’ll pay a fixed rate, GHS 25, 35, or 45. For those earning between GHS 20,000 and GHS 500,000, a 3% tax applies on their turnover,” Dr. Kombat stated.
This new approach replaces traditional tax collection methods with simpler rules tailored to small-scale operators. Dr. Kombat also called on the public and media to support the rollout.
Jennifer Moffatt, Country Manager at BudgIT Ghana, emphasized the need for better cooperation between the GRA and local authorities.
“Informal workers tend to trust local assemblies more than the GRA. We recommend stronger collaboration between GRA and MMDAs for better results,” she noted.
Esi Sam, Chairperson of the Society for Women in Taxation, backed the plan. She believes it will remove the confusion surrounding tax payments for informal businesses.
“When people understand the process, they’re more likely to comply. The simplified system is a step in the right direction,” she said.
In summary, the modified tax scheme aims to boost informal sector contributions to national revenue while reducing barriers to compliance.
