Ghana’s ability to meet its domestic revenue mobilisation targets will increasingly depend on improved tax compliance, as reforms under the new Value Added Tax (VAT) Act, 2025 (Act 1151) reduce the effective tax burden on businesses and consumers.
Dr Dominic Dokbilla Naab, Acting Head of VAT Administration at the Ghana Revenue Authority (GRA), said the government’s decision to reduce the effective VAT rate from 21.9 per cent to 20 per cent was intended to ease the tax burden, eliminate the cascading effect of taxes and create a fairer tax system.
He was speaking at a webinar organised by the Society of Women in Taxation (SWIT), the female wing of the Chartered Institute of Taxation Ghana (CITG), on Wednesday, November 11, 2026.
The webinar, held under the theme “VAT Compliance: A Catalyst for Revenue Mobilisation”, brought together tax professionals, consultants, business representatives and other stakeholders to discuss the implications of the new VAT regime, which took effect in January 2026.
Dr Naab explained that under the previous VAT arrangement, levies were added to the cost of goods and services before VAT was calculated, resulting in a cascading effect that increased the overall cost of doing business and placed additional pressure on consumers.
The new law, he said, was designed to address this situation by applying VAT and the relevant levies on the same base.
However, he stressed that the reduction in the effective tax rate meant the GRA would have to strengthen compliance efforts to meet its revenue targets.
“The success story now has to do with compliance,” he said, adding that without improved compliance, the Authority could struggle to meet its increased revenue expectations.
Dr Naab attributed the growing importance of domestic revenue mobilisation partly to declining support from development partners, arguing that Ghana could no longer depend heavily on external financing to meet its development needs.
“Foreign aid has retreated, even if it will come, not at the levels that we were getting in the past. Therefore, we need to take our destiny into our own hands,” he asserted.
He identified VAT, corporate income tax, personal income tax and withholding taxes as important domestic revenue sources, but maintained that VAT required particular attention because it was linked to consumption expenditure.
Businesses and consumers urged to support compliance
The GRA official called on businesses to fulfil their obligations by registering where required, filing returns within the stipulated periods, paying taxes on time and accurately reporting their revenues.
He also encouraged consumers to demand receipts when purchasing taxable goods and services, explaining that VAT compliance was a shared responsibility between businesses, consumers and government.
According to him, businesses that collect VAT from customers but fail to remit the money to the GRA undermine the country’s revenue mobilisation efforts.
He further cautioned against under-declaration of sales and inaccurate input tax claims, noting that the Authority was increasingly relying on data analysis and cross-checking of taxpayer records to identify discrepancies.
Dr Naab disclosed that the GRA was undertaking test purchases, business profiling and issue-based audits to strengthen enforcement.
He explained that the Authority was also matching information submitted by businesses against records from their suppliers to identify cases where input tax claims exceeded the corresponding transactions.
The exercise, he said, had been undertaken between January and August 2026.
He, however, emphasised that enforcement must be accompanied by fairness, urging the GRA to broaden the tax base rather than repeatedly targeting businesses already complying with their obligations.
“Compliance also means that GRA must broaden the taxpayers,” he said, stressing that compliant businesses should not become victims of an enforcement system that fails to bring more taxpayers into the tax net.
GRA highlights measures to improve compliance
Dr Naab said the Authority had introduced several administrative and technological measures to make tax compliance easier.
These include online filing and payment systems, simplified tax administration processes, improved taxpayer support services and the use of artificial intelligence tools to support customs valuation and verification.
He also highlighted the establishment of the Independent Tax Appeals Board, which provides taxpayers with an avenue to challenge decisions they consider unfair or unsatisfactory.
He said the GRA was committed to creating an enabling environment in which taxpayers could understand and fulfil their obligations without unnecessary administrative difficulties.
On the revised VAT registration threshold, Dr Naab indicated that the new law had introduced a GH¢750,000 threshold covering businesses dealing in both goods and services, while also providing for voluntary registration in appropriate circumstances.
He explained that businesses below the threshold could be subject to a different tax treatment, including the modified taxation arrangement, depending on their circumstances.
SWIT calls for greater public understanding
Earlier, SWIT Chairperson Esi Duma Sam said the webinar formed part of the society’s commitment to supporting the government’s tax education and compliance agenda.
She said the new VAT law had introduced significant changes to Ghana’s tax landscape, making it necessary for professionals and businesses to understand their implications.
The first female President of CITG, Mrs. Ernestina Appiah, also underscored the importance of the engagement, explaining that the introduction of Act 1151 had created the need for practical guidance to help taxpayers navigate the new system.
She said the Institute’s mandate was to bridge the gap between tax policy, administration and practice.
She said Ghana had previously been collecting less than a third of its potential VAT revenue, leaving an estimated annual gap of about GH¢69 billion, equivalent to nearly six per cent of Gross Domestic Product (GDP).
She questioned whether the introduction of a fairer VAT system would translate into improved compliance among businesses and consumers.
The engagement formed part of SWIT’s broader efforts to promote tax awareness, professional development and voluntary compliance, as authorities seek strengthen domestic revenue mobilization.
