Some tax analysts are calling on the Ghana Revenue Authority (GRA) to review the 3% flat rate applied to businesses with annual sales of GH¢20,000 and above, arguing that the threshold is too low.
The call comes amid the rollout of several new tax policies, including the Modified Taxation Scheme, which takes effect today, July 1, 2025. The scheme targets informal sector workers across the country.
Speaking to Citi Business News, tax analyst Francis Timore Boi acknowledged the GRA’s efforts in implementing the scheme but emphasized the need to revisit the flat rate threshold.
“The threshold of GH¢20,000 is quite low. It should be increased slightly to exempt very small businesses. Imagine 3% of GH¢20,000—that’s just GH¢600 for the entire year. That’s very little. A higher threshold would make more sense,” he said.
Despite his concerns, he praised the broader initiative, noting its potential to expand the tax base and reduce the overall tax burden in the long term.
“If we’re able to broaden the tax base, you’ll see that the current tax rates can actually come down. The reason government keeps introducing higher rates and consumption taxes is because too few people are in the tax net.”
Mr. Timore Boi also expressed concern over the scheme’s mid-year rollout, highlighting the limited time available for businesses to adjust and comply.
“We have just six months left in the year, and it seems there hasn’t been enough sensitization. Initially, we’re likely to see resistance from small businesses—especially since many of them are being taxed for the first time.”
He stressed the need for more intensive public education campaigns and suggested that future rollouts begin at the start of the calendar year.
“More sensitization is key. Ideally, implementation should begin in January to give government a full year to collect revenue and give businesses time to adapt. Still, it’s better late than never. If executed well, this scheme could significantly broaden the tax base and, over time, reduce rates on other tax categories.”
The Modified Taxation Scheme applies to different categories of businesses based on their annual income:
Small businesses earning less than GH¢20,000 a year
→ Will pay a fixed amount every quarter (up to GH¢45).
Businesses earning between GH¢20,000 and GH¢500,000 a year
→ Will pay a flat tax rate of 3% on their total annual sales.
Businesses earning above GH¢500,000 a year
→ Will be taxed using graduated rates and allowed to make deductions based on their expenses.
Tax payments can be made through mobile money, USSD (*222#), or at the bank.
Business owners can register for the scheme at any GRA office or through the GRA mobile app.
