Modified Taxation Scheme Takes Off July 1

General


Accra: The Ghana Revenue Authority (GRA) is expected to implement key policies in the country’s tax administration laws from July 1, 2025, to boost domestic revenue drive for the government.



According to Ghana News Agency, the new measures include the Modified Taxation Scheme, VAT on Real Estate, and VAT on Non-Life Insurance. The Modified Taxation Scheme (MTS) presents a simplified approach for the informal sector, introducing a flexible framework that targets micro, small, and medium businesses across the country. This initiative aligns with the Income Tax Act, 2015 (Act 896).



Mr. Anthony Kwasi Sarpong, Acting Commissioner-General of the GRA, stated during a media engagement that the scheme does not represent an additional tax but is instead a simplified method of calculating personal income tax for eligible traders and entrepreneurs. He emphasized the importance of mobilizing more revenue to address critical budgetary allocations, as reiterated by the President and the Minister of Finance.



Sarpong highlighted the need for GRA to focus on existing revenue streams and ensure their effective implementation. He expressed confidence that these measures would seal many of the revenue loopholes affecting the country. The Commissioner-General reassured stakeholders that these are not new taxes and are not intended to overburden Ghanaians but rather to support the resetting of the economy.



Key highlights of the scheme include requirements for Ghanaian residents earning income solely from business activities within the country. This involves Presumptive Tax Based on Installments (PTI), which mandates fixed quarterly payments up to GHS45 for businesses with an annual turnover below GHS20,000. Additionally, the Presumptive Tax Based on Turnover (PTT) imposes a flat 3% rate for businesses earning between GHS20,000 and GHS500,000 annually. For businesses exceeding GHS20,000, a Modified Cash Basis (MCB) applies graduated rates with allowable deductions.



Alongside the Modified Taxation Scheme, the 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 mobilization.



Mr. Sarpong also mentioned the deepening of the Special Voluntary Disclosure Program (SVDP), an initiative rolled out in 2024. This program encourages resident persons who earn incomes abroad to voluntarily disclose these incomes, which have not been taxed, without incurring penalties.



Furthermore, the GRA will implement VAT on the Rental of Immovable Property and the Supply of Immovable Property by Estate Developers, in accordance with the provisions of the Value Added Tax (VAT) Amendment Act, 2023 (Act 1107). Estate developers will be required to charge a 5% VAT on supplies, with exemptions for residential dwellings and agricultural properties.



Regarding insurance, the Commissioner-General noted that insurance premiums covered for VAT purposes include fire, marine, liability, property, indemnity, engineering, travel, burglary, personal accident, and workmen’s compensation insurance. Insurance companies are expected to charge a 15% VAT on all insurance premiums under this provision.



To ensure effective implementation, companies are expected to update their accounting and invoicing systems, train staff on VAT application and reporting, communicate changes proactively to clients, and ensure timely registration for VAT if not already registered. The combination of these measures represents a balanced approach to revenue generation, creating multiple pathways for compliance while ensuring critical sectors contribute their fair share.