The Ghana Union of Traders’ Associations (GUTA) has warned that the government’s new Value Added Tax (VAT) reforms will severely affect small and medium-sized businesses and create unfair competition in markets across the country.
According to the Association, the abrupt change from the 4% flat rate to a 20% VAT for many traders will have damaging consequences.
In a statement issued on November 18, GUTA’s First Deputy Secretary General, Richard Amamoo, said the Union is watching “with grave concern” the problems that are likely to arise under the new tax regime.
He said GUTA “acknowledge and welcomes measures aimed at enhancing tax compliance and improving revenue collection,” but stressed that the reforms come with serious unintended consequences.
Mr Amamoo said the new threshold of GH¢750,000 creates a market split that will “segregate” traders.
According to him, two traders dealing in the same products in the same market will now be treated differently. One will charge 20% VAT because their turnover crosses the threshold.
The other, with lower turnover, will charge nothing. GUTA fears customers will simply go to the trader without VAT, leaving the other at a huge disadvantage. The Union says this will “distort fair competition”.
GUTA also warned that traders who were previously on the 4% flat rate scheme will now be forced into the 20% VAT bracket.
Mr Amamoo said the daily turnover exemption of GHS 2,366 means any excess will push a trader into the standard regime. He said this will lead to “higher prices for consumers and loss of business for affected traders”.
He called on the government to allow traders to opt for a modified tax system that ensures parity. GUTA believes a fairer structure will promote compliance and reduce the risk of non-compliance fueled by pressure and imbalance.
Mr Amamoo also touched on the government’s planned introduction of Artificial Intelligence at the ports.
He said GUTA supports technology that improves efficiency, but insists that taxes at the port must first be rationalised “as promised” before AI systems are deployed.
GUTA says it remains committed to dialogue, but insists the reforms must not “harm the livelihood of Ghanaian traders”.
