The Ghana Revenue Authority (GRA) has issued a stark warning over systemic Value Added Tax (VAT) non-compliance, revealing that a staggering 60% of businesses are either unregistered or fail to remit the tax they collect from customers—a gap that threatens the country’s domestic revenue mobilisation targets.
Speaking at the 14th Annual International Tax Conference 2026 in Accra, GRA Commissioner-General Anthony Kwasi Sarpong laid bare the scale of the challenge. “Only four out of every ten businesses in Ghana correctly charge and account for VAT. The remaining six either do not register at all, or they register but collect the money from consumers and it never ends up with the government,” he told delegates, drawing gasps from the audience of tax professionals and policymakers.
The revelation underscores a long-standing structural weakness in Ghana’s tax administration. VAT, introduced in 1998 and currently levied at a standard rate of 15% (with a reduced rate of 3% for the flat-rate scheme), accounts for roughly 25% of total domestic tax revenue—yet collection rates have consistently fallen short of projections. According to the Ministry of Finance’s 2026 mid-year review, the GRA missed its VAT target by over GH¢2.1 billion in the first half of the year, a deficit Sarpong attributed squarely to poor compliance.
Sarpong outlined a two-pronged strategy to tackle the crisis: technology and enforcement. The centrepiece is the implementation of the Fiscal Electronic Devices (FED) Act, which mandates that all VAT-registered businesses process transactions through government-approved electronic invoicing machines, known as Electronic Fiscal Devices (EFDs). These devices transmit sales data in real time to the GRA’s central server, allowing the authority to reconcile monthly VAT returns with actual transaction volumes automatically.
However, the Commissioner-General conceded that technology is not a silver bullet. He revealed that a pilot programme had already uncovered widespread evasion tactics. “When our officers are on the field, the machine works perfectly. The moment we leave the shop, the machine stops working,” he said, describing how some retailers disable or bypass the EFDs during off-surveillance hours. Other reported practices include issuing manual receipts for cash sales and using unregistered secondary tills to divert revenue.
To counter this, Sarpong announced that the GRA will deploy a hybrid model combining real-time data analytics with unannounced field audits and stiffer penalties. The Authority is also collaborating with the National Identification Authority to link taxpayer identification numbers (TINs) with business registration data, aiming to flush out the estimated 300,000 unregistered informal traders who operate outside the VAT net. “We are combining technology with strong compliance measures—fines, sanctions, and even closure of non-compliant businesses—to ensure that VAT collected is VAT remitted,” he said.
The conference, themed “Digitalisation and Tax Integrity: The Road to Self-Reliance,” also featured discussions on the proposed expansion of the VAT base to include digital services, e-commerce platforms, and the sharing economy—sectors that have largely escaped taxation. Finance Ministry officials present noted that closing the VAT loophole could unlock an additional GH¢4–5 billion annually, enough to fund critical healthcare and education projects without resorting to new taxes.
Reaction from business associations was mixed. The Ghana Union of Traders Association (GUTA) welcomed the digital push but warned that small enterprises, particularly in the informal sector, struggle with the cost of EFDs and the technical know-how to operate them. Sarpong acknowledged this, pledging that the GRA would roll out subsidised devices and free training clinics across all regional capitals before the FED mandate becomes fully enforceable in 2027.
For now, the clock is ticking. With Ghana’s fiscal deficit hovering at 6.8% and international creditors demanding improved revenue performance, the GRA has little room for error. Sarpong left delegates with a pointed message: “This is not about punishing businesses—it is about fairness. The honest taxpayer should not bear the burden of the dishonest. We will ensure that every cedi collected from the consumer makes its way to the nation’s coffers.” As the conference concluded, participants awaited the publication of new compliance guidelines expected within the next fortnight.
