2027 Budget: GUTA calls for restoration of 4% flat-rate VAT with modest increase (Video)

The Ghana Union of Traders Associations (GUTA) has urged the government to reintroduce a flat-rate Value Added Tax (VAT) system in the 2027 Budget, with a proposed increase to 6% to 7% from the current 4%. GUTA President Clement Boateng argued that this simpler system would make tax compliance easier for traders, especially those in the informal sector who find the current system challenging to navigate.

The previous flat-rate VAT allowed eligible traders to pay a consistent 4% rate without having to account for input and output VAT, unlike the standard system. While GUTA would prefer the return of the 4% rate, it is prepared to accept an increase to 6% or 7% to reinstate the simplified arrangement. Boateng maintained that the flat-rate system would reduce the administrative burden on businesses and potentially lower costs for consumers.

He also noted that the current standard VAT system could place additional pressure on businesses and affect access to business opportunities, including government contracts. GUTA is urging the government to review the Value Added Tax Act, 2025 (Act 1151) to reintroduce a simplified flat-rate VAT that considers the needs of informal sector operators while ensuring continued contributions to national revenue.