Sign in Subscribe
Income tax

Ghana Revenue Authority's Modified Taxation Scheme Under Fire

Strategic Insights

— 1 min read

As the Modified Taxation Scheme takes effect on July 1, 2025, aiming to widen the tax net by targeting informal sector workers, tax analyst Francis Timore Boi has expressed concerns about the GHS20,000 annual income threshold for businesses. He argues that this threshold is too low and unfairly burdens very small businesses, suggesting that a higher threshold would be more reasonable and impactful. Boi believes that the GRA's efforts to expand the tax base could eventually lead to lower tax rates across the board, but he criticizes the timing of the rollout and recommends introducing future tax schemes at the beginning of the year with strong public education campaigns.

Key Takeaways:

  • The Ghana Revenue Authority's Modified Taxation Scheme has a threshold of GHS20,000 for businesses, which tax analyst Francis Timore Boi believes is too low and unfairly burdens very small businesses.
  • Boi estimates that taxing businesses at the current level yields only GHS600 annually, which he considers insignificant and suggests a higher threshold would be more reasonable and impactful.
  • He recommends raising the threshold to ease the tax burden on micro-enterprises, citing that expanding the tax base could eventually lead to lower tax rates across the board.
  • Boi expresses concern about the timing of the rollout, stating that starting in the middle of the year gives businesses limited time to understand and adjust to the changes.
  • He suggests that future tax schemes be introduced at the beginning of the year and accompanied by strong public education campaigns to ease implementation.
  • Boi praises the GRA's efforts to widen the tax net and acknowledges the benefits of the broader policy.

Statistics:

  • 3% flat rate applied to businesses earning GHS20,000 or more annually (Ghana Web)
  • GHS20,000 annual income threshold for businesses (Ghana Web)
  • GHS600 estimated annual tax yield for businesses reaching the current threshold (Ghana Web)
  • Seven months remaining in 2025 for businesses to adjust to the new tax scheme (Francis Timore Boi)

Sources:

  • Ghana Web, 2025 (Francis Timore Boi urges GRA to review GHS20,000 threshold)
  • Ghana Web, 2025 (Modified Taxation Scheme to target informal sector workers)
  • Citi Business News, 2025 (Francis Timore Boi's quote on the benefits of widening the tax net)

Read more