GUTA has raised concerns that the new VAT threshold of GH¢750,000, which requires businesses exceeding it to pay 20% VAT, could create unfair competition, splitting the market between traders who charge VAT and those who do not.

Reacting to the call in a statement issued on 24th November, 2025, the policy think tank said the threshold is not ‘a sudden hike but a return to the long-standing real value of VAT entry points when Ghana’s volatile exchange rate is considered.’

The think tank explained that VAT thresholds exist in Ghana and globally to protect small businesses and allow tax authorities to focus on medium and large taxpayers who generate most revenue.

ACTOR noted that the dollar value of the threshold has remained stable over the years, with the proposed GH¢750,000 roughly equivalent to USD 62,500 within historical ranges. Their analysis also showed the real price difference between VAT-registered and non-registered traders is minimal about 1.5%.

The think tank also disagreed with GUTA’s suggestion that all traders should be allowed to opt into the Modified Tax System (MTS), saying thresholds cannot be optional without risking system collapse. The MTS, ACTOR stressed, is meant only for micro and small businesses below the VAT threshold.

While defending the reform, ACTOR acknowledged traders’ concerns and urged the GRA to strengthen monitoring and turnover verification to prevent VAT evasion. The group concluded that strong collaboration among stakeholders is key to a smooth rollout, minimising market distortions and building trust in the tax system.