A revised tax system will be implemented by the Ghana Revenue Authority (GRA) on July 1st with the goal of enhancing tax compliance and collecting money from the unorganized sector.
Workers in the informal sector who are not already registered with the GRA but make less than GHS 20,000 annually will have to pay a fixed quarterly tax between GHS 25 and GHS 45 under the new structure.
The revised system aims to expand Ghana’s tax base and promote equity in revenue mobilization, according to Dr. Alex Kombat, Assistant Commissioner for Research and Policy at the GRA, who spoke at the launch of the final report on Informal Sector Tax Compliance Research, “Ghana’s Untapped Economy: Analysis of Tax Compliance Behaviour of Informal Sector Workers in the Greater Accra Region,” which was prepared by BudgIT Ghana in collaboration with the Society for Women in Taxation Ghana and the International Budget Partnership (IBP).
“We have developed a system called modified taxation. Those with turnover below GHS 20,000 will pay a fixed amount—GHS 25, GHS 35, or GHS 45. For those with turnover between GHS 20,000 and GHS 500,000, we’ll apply a 3% tax on their turnover. This marks a shift from the traditional tax collection methods,” he stated.
In order to secure the initiative’s successful execution, Dr. Kombat urged the public, particularly the media, to support it, adding that it is anticipated to debut by July 1.
In order to improve tax collection in the unorganized sector, Jennifer Moffatt, the country manager of BudgIT Ghana, emphasized the value of cooperation between the GRA and local government.
“One of our key recommendations is for the GRA and Metropolitan, Municipal, and District Assemblies (MMDAs) to collaborate on tax collection. Many informal sector workers feel more comfortable paying levies to local authorities than to the GRA,” she noted.
Esi Sam, the chairperson of the Society of Women in Taxation, supported the effort, saying it will make it easier for workers in the unorganized sector to comply with tax laws.
“When you understand something, it becomes easy to do because it’s straightforward. So, if the modified taxation system is being introduced, it’s a good move—it will simplify the process and make it easier for people to understand,” she said.