Story by Eugene Nyarko Jnr. | Accra | Wednesday, February 11, 2026
The Ghana Union of Traders Association (GUTA) has expressed strong opposition to the newly introduced VAT regime under Act 1151, describing it as burdensome, complex and detrimental to businesses and consumers.
Addressing a press conference at the Association’s headquarters in Accra, a speech read by Mr. Clement Boateng, President of the Association said the new tax system poses significant challenges to the trading community and could lead to increased consumer prices and potential job losses if not urgently reviewed.
According to GUTA, prior to the presentation of the 2026 Budget to Parliament, the Association submitted recommendations to the Ministry of Finance, raising concerns particularly about the abolition of the VAT flat rate scheme. However, the Association said its concerns were not incorporated into the final policy.
Following the budget presentation, GUTA indicated that it engaged the Ghana Revenue Authority (GRA) to highlight anticipated implementation challenges. Both parties, the Association said, agreed on the need for education and sensitisation programmes as well as the formation of a technical committee to address concerns.
However, GUTA accused the GRA of reneging on that understanding by instead forming a task force which it claims has been harassing and coercing traders into complying with the new regime.
“This move undermines our agreement to issue a joint press release announcing our resolutions,” the statement said.
GUTA further questioned the GRA’s position that VAT is purely a consumption tax borne by the final consumer, arguing that the new structure has resulted in cascading price effects that are already discouraging purchases.
The Association cited a practical example: under the previous 4 per cent flat rate, an item costing GH¢1,000 would attract GH¢40 VAT, bringing the total to GH¢1,040. Under the new regime, traders say the applicable rate significantly increases the final price, making goods less affordable and leading some consumers to reject purchases outright.
GUTA maintained that while it supports government’s efforts to mobilise revenue for national development and encourages tax compliance, the current system is overly complex, involving difficult input-output calculations, excessive paperwork and compliance burdens—especially for small-scale and informal sector traders.
The Association rejected assertions that Ghana’s low tax-to-GDP ratio is due to traders’ unwillingness to pay taxes, arguing instead that a complicated tax structure discourages compliance. It noted that many informal sector operators lack the technical expertise to navigate the new regime and cannot afford professional tax consultants, leading to unintentional non-compliance and penalties.
To address the situation, GUTA proposed several measures, including:
- An urgent review of Act 1151 and the reintroduction of a simplified 3 to 4 per cent flat rate for the informal sector.
- Intensified trader registration and education to broaden the tax net.
- Making the new VAT regime optional for traders who are comfortable with the system.
- Introducing incentives for shops and retail outlets to register and collect VAT.
- Encouraging consumers, through education, to demand VAT receipts to improve revenue mobilisation.
The Association also called for the immediate withdrawal of the GRA task force and urged government to facilitate meaningful dialogue between traders and tax authorities to resolve implementation challenges.
“We call on the government to intervene to ensure collaborative engagement with traders to achieve a fair and effective tax system that supports Ghana’s development rather than overburdening traders and consumers,” the statement said.
GUTA expressed optimism that its concerns would receive urgent attention and reaffirmed its readiness to engage constructively with authorities to find a workable solution.
