Ghanaians since January 1, 2023, were expected to pay an accumulate of 21% tax on goods and services.
This comes after there has been a recent 2.5% increment in Value Added Tax (VAT), which was approved by parliament after it was presented in Parliament by Finance Minister Ken Ofori during the 2023 budget reading.
The 2.5% increment would see the initial 12.5% VAT on products move to 15%.
Along with VAT, customers pay a 2.5% NHIL (National Health Insurance Levy) tax, another 2.5% on GETFUND (Ghana Education Trust Fund) and a 1% COVID LEVY, this added to the 2.5% tax making 21%.
However, the 15% VAT is applicable to the other taxes, which are NHIL, COVID LEVY and GETFUND.
The President of the Ghana Union of Traders Association (GUTA), Dr. Joseph Obeng in an interview last night with Ghana Tonight on TV3, the tax is another layer of cost of doing business.
The structure of the tax system he said does not ensure compliance and GUTA have been calling for a total reform of the tax system.
He mentioned that there are currently three taxing systems running in the country.
“The tax as it is structured now has three payment system in the market, those who are registered under or have been migrated from flat rate into the standard rate, they will be paying 21%, and those who are captured by way of threshold also under flat rate of 4%, and those who do not qualify to tax the VAT at all,” he said.
He said with the three systems running, consumers have discretion to choose where to buy from, as consumers would rather shop with traders who are not duly registered under the tax system.