The Ghana Revenue Authority (GRA) has confirmed that the recent reduction in Value Added Tax (VAT) has returned an estimated GH¢6.5 billion to consumers, contributing to a noticeable decline in prices of goods and services across the country.
According to the GRA, the VAT cut was designed to ease cost-of-living pressures while stimulating consumer spending and supporting businesses. Since the reforms, prices have fallen by about 1.9 per cent following a reduction of the effective VAT rate to 20 per cent.
Speaking during a VAT compliance monitoring exercise at shopping malls in the Spintex area, GRA Commissioner-General Anthony Kwasi Sarpong said early indicators suggest the reforms are achieving their intended goals.
“The reforms, which include a VAT rate reduction, removal of the COVID-19 levy, VAT decoupling, and increased thresholds for small businesses, are helping to lower the tax burden on essential commodities and services,” Sarpong explained.
“Retailers are passing on these savings to consumers, improving purchasing power at a time when many Ghanaians are still recovering from high inflation and economic slowdown.”
Sarpong noted that inspections at outlets such as Palace Mall, Melcom, Orca Décor, United Commercial Trading, and Palace Home Décor showed that businesses had updated their systems to reflect the revised VAT rates. Shoppers interviewed at the malls also expressed satisfaction with the lower prices.
He urged businesses to voluntarily comply with the new VAT framework and encouraged consumers to request VAT invoices for every purchase to strengthen enforcement.
“Sustained compliance by both businesses and consumers is critical for revenue mobilisation, which underpins the government’s broader agenda of economic growth, job creation, and national transformation,” he said.
However, the GRA warned that the full benefits of the VAT reduction depend on ongoing compliance.
Meanwhile, the Ghana Union of Traders Association (GUTA) has raised concerns over the VAT flat rate increase from 4 to 20 percent, warning it could negatively impact small businesses.
