Modified taxation begins July 1 – GRA
The Ghana Revenue Authority (GRA) has announced that several key tax policy measures will take effect from July 1, 2025, as part of efforts to enhance domestic revenue mobilisation and reduce reliance on foreign aid.
The new measures include the implementation of the Modified Taxation Scheme (MTS), the introduction of Value Added Tax (VAT) on Real Estate, and VAT on Non-Life Insurance services.
The MTS is designed to simplify tax compliance for micro, small, and medium-sized enterprises (MSMEs), particularly in the informal sector. Introduced under the Income Tax Act, 2015 (Act 896), the scheme offers a more flexible and accessible way for informal traders and entrepreneurs to fulfill their tax obligations.
At a recent media briefing, Acting Commissioner-General of the GRA, Anthony Kwasi Sarpong, emphasized that the new scheme does not introduce additional taxes, but rather offers a simplified approach to calculating personal income tax for qualifying businesses.
“As the President and Finance Minister have stated, Ghana must boost its internal revenue to meet essential budgetary needs, especially now that many development partners have reduced support,” Sarpong said.
“We’re not imposing new taxes. These are existing policies we are now enforcing more effectively. By doing so, we can close revenue loopholes and help reset the economy without overburdening the average Ghanaian,” he added.
The GRA reiterated its commitment to ensuring a smooth rollout and has encouraged taxpayers to seek clarity and support through its various offices and digital platforms.
Key Highlights of the Scheme:
• Eligibility: Ghanaian residents earning income solely from business activities within the country.
• Tax Categories:
o Presumptive Tax Based on Instalments (PTI): Fixed quarterly payments (up to GH¢45) for businesses with an annual turnover below GH¢20,000.
o Presumptive Tax Based on Turnover (PTT): A flat 3% rate for businesses earning between GH¢20,000 and GH¢500,000 annually.
o Modified Cash Basis (MCB): For businesses exceeding GH¢20,000, applying graduated rates with allowable deductions.
• Multiple payment options, including mobile money, USSD codes (*222#), and bank deposits.
• Simplified registration via GRA offices or a dedicated mobile app.
Alongside the Modified Taxation Scheme, GRA is implementing several other strategic initiatives designed to plug revenue leakages and broaden the tax base. These measures form part of the government’s comprehensive strategy to reduce reliance on debt financing and strengthen domestic revenue mobilisation.
The Special Voluntary Disclosure Program (SVDP), which was rolled out in 2024, is being deepened. It is an initiative that seeks to give expression to the income tax law and residents who earn incomes abroad. This program provides an opportunity for these persons to voluntarily disclose incomes earned abroad, which they haven’t paid tax on, without incurring penalties.
VAT on the Rental of Immovable Property and the Supply of Immovable Property by Estate Developers will also be implemented in accordance with the provisions of the Value Added Tax (VAT) Amendment Act, 2023 (Act 1107), all estate developers are to charge VAT on the supply of immovable property.
Estate developers must charge a 5% VAT on:
• Immovable property by an estate developer calculated on the taxable supply
• Immovable property for rental purposes, other than for accommodation in a dwelling or a commercial rental establishment
A 1% COVID-19 levy is also applicable on the supply of immovable property.
Additionally, an appointed withholding agent who fails to charge and account for the tax to the Commissioner-General by the 15th of the month following the due date shall be liable to pay the VAT that should have been withheld, along with a penalty of thirty per cent (30%) of the amount.
Exemptions for residential dwellings and agricultural properties.