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In a major step to improve domestic revenue mobilisation, the Ghana Revenue Authority (GRA) is set to implement a new modified tax system from July 1, 2025, aimed at drawing more informal sector workers into the tax net.
The policy, which introduces fixed quarterly taxes for small informal businesses and a simplified turnover tax for mid-sized operators, is designed to boost compliance while easing the burden of complex tax filing procedures.
Under the system, individuals and micro-entrepreneurs with annual turnover below GHS 20,000 will pay a fixed tax ranging between GHS 25 and GHS 45 every quarter. For those earning between GHS 20,000 and GHS 500,000 annually, a flat 3% tax on turnover will apply.
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The new structure was unveiled during the launch of a research report by BudgIT Ghana, titled “Ghana’s Untapped Economy: Analysis of Tax Compliance Behaviour of Informal Sector Workers in the Greater Accra Region”. The report was produced in collaboration with the Society for Women in Taxation Ghana and the International Budget Partnership (IBP).
Dr Alex Kombat, Assistant Commissioner for Research and Policy at the GRA, explained that the new approach is part of efforts to reform Ghana’s revenue collection system, which has historically struggled to capture earnings from the vast informal economy.
“We’re shifting away from traditional models of tax collection. With the modified tax system, we’re introducing simple, fixed-rate payments for low-income earners and a fair percentage for others within the informal space,” he said. “It’s about fairness and expanding the base.”
The informal sector, which includes artisans, traders, street vendors, and small-scale service providers, accounts for a significant portion of economic activity in Ghana. Yet tax compliance within this sector remains extremely low due to mistrust, lack of education, and complex filing systems.
Jennifer Moffatt, Country Manager at BudgIT Ghana, emphasised the need for collaboration between the GRA and local government agencies to improve trust and compliance.
“We found that many informal workers are more comfortable engaging with their local assemblies than the GRA. A stronger partnership between the two could make tax payment more convenient and trustworthy,” she suggested.
Chairperson of the Society for Women in Taxation, Esi Sam, also welcomed the initiative, praising its clarity and potential to empower citizens with better understanding.
“Tax compliance increases when the process is transparent and easy to grasp. This modified regime makes it accessible, especially for those who have traditionally been left out,” she noted.
The GRA has urged the media and civil society to help educate the public about the new system. As the government seeks to improve fiscal sustainability without overburdening the formal sector, the success of this informal sector-focused reform will be closely watched.
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