Ghana Revenue Authority Implements Key Tax Policies to Boost Domestic Revenue Drive

Strategic Insights -

The Ghana Revenue Authority (GRA) is set to implement key policies aimed at boosting domestic revenue drive for the government. These policies, including the Modified Taxation Scheme, VAT on Real estate, and VAT on Non-Life Insurance, are expected to be implemented from July 1, 2025. The Modified Taxation Scheme introduces a flexible framework targeting micro, small, and medium businesses across the country. The scheme is designed to simplify the method of calculating personal income tax for eligible traders and entrepreneurs.

Acting Commissioner-General of the GRA, Anthony Kwasi Sarpong, clarified that the scheme is not an additional tax but a simplified method of calculating personal income tax for eligible traders and entrepreneurs. He emphasized that the scheme is not intended to overburden Ghanaians but rather to support the resetting of the economy. The scheme provides multiple payment options, including mobile money, USSD codes, and bank deposits. Simplified registration via GRA offices or a dedicated mobile app is also available.

Key Takeaways:

  • The Modified Taxation Scheme (MTS) is a flexible framework targeting micro, small, and medium businesses across the country, with a focus on simplifying the method of calculating personal income tax for eligible traders and entrepreneurs.
  • The scheme introduces three tax categories: Presumptive Tax Based on Installments (PTI), Presumptive Tax Based on Turnover (PTT), and Modified Cash Basis (MCB).
  • Businesses with an annual turnover below GH20,000 are required to pay a fixed quarterly payment of up to GH45 under the PTI system.
  • Businesses earning between GH20,000 and GH500,000 annually are required to pay a flat 3% rate under the PTT system.
  • Businesses exceeding GH20,000 are subject to graduated rates under the MCB system with allowable deductions.
  • Multiple payment options, including mobile money, USSD codes, and bank deposits, are available under the MTS scheme.
  • Simplified registration via GRA offices or a dedicated mobile app is also available under the MTS scheme.
  • The Special Voluntary Disclosure Program (SVDP) is being deepened to encourage individuals to disclose income earned abroad without incurring penalties.
  • VAT on the Rental of Immovable Property and the Supply of Immovable Property by Estate Developers will be implemented in accordance with the provisions of the Value Added Tax (VAT) Amendment Act, 2023 (Act 1107).
  • Estate developers are required to charge VAT on the supply of immovable property at a rate of 5%.
  • Insurance companies are required to charge a 15% VAT on insurance premiums covered under the provision.
  • The GRA is creating multiple pathways for compliance while ensuring critical sectors contribute their fair share.

Statistics:

  • The Modified Taxation Scheme (MTS) targets micro, small, and medium businesses across the country.
  • The scheme provides three tax categories: Presumptive Tax Based on Installments (PTI), Presumptive Tax Based on Turnover (PTT), and Modified Cash Basis (MCB).
  • Businesses with an annual turnover below GH20,000 are required to pay a fixed quarterly payment of up to GH45 under the PTI system.
  • Businesses earning between GH20,000 and GH500,000 annually are required to pay a flat 3% rate under the PTT system.
  • Businesses exceeding GH20,000 are subject to graduated rates under the MCB system with allowable deductions.
  • Multiple payment options, including mobile money, USSD codes, and bank deposits, are available under the MTS scheme.
  • Simplified registration via GRA offices or a dedicated mobile app is also available under the MTS scheme.
  • VAT on the Rental of Immovable Property and the Supply of Immovable Property by Estate Developers will be implemented in accordance with the provisions of the Value Added Tax (VAT) Amendment Act, 2023 (Act 1107).
  • Estate developers are required to charge VAT on the supply of immovable property at a rate of 5%.
  • Insurance companies are required to charge a 15% VAT on insurance premiums covered under the provision.

Sources:

  • Ghana Revenue Authority (GRA)
  • The Business and Financial Times
  • Ghanaian Times
  • Value Added Tax (VAT) Amendment Act, 2023 (Act 1107)
  • Income Tax Act, 2015 (Act 896)