GRA Introduces Simplified Tax Scheme to Improve Informal Sector Compliance

The Ghana Revenue Authority has rolled out a new Modified Taxation Scheme (MTS) aimed at simplifying tax compliance for businesses operating within Ghana’s informal sector. The initiative forms part of broader efforts to expand the tax net while reducing the administrative burden that has historically discouraged voluntary compliance among micro and small enterprises.

The scheme was formally introduced at a stakeholder engagement in Accra, where the Commissioner-General of the GRA, Anthony Kwasi Sarpong, described it as a practical response to the realities of the informal economy. According to him, the MTS is designed to make tax obligations clearer, more predictable, and easier to fulfil, particularly for individuals and businesses with limited accounting capacity.

At the core of the scheme is a simplified income tax structure that applies to taxpayers with annual turnover not exceeding GH¢500,000. Eligible businesses and self-employed individuals will be required to pay a flat tax rate of three percent of their gross income. The GRA has explained that this approach removes the need for complex record-keeping and eliminates uncertainty around tax assessments, making compliance more accessible for traders, artisans, market operators, and small shop owners.

Importantly, the Authority has clarified that the Modified Taxation Scheme does not introduce a new tax. Rather, it represents a streamlined method of assessing personal income tax for a segment of taxpayers who are not registered under the VAT regime. By simplifying calculation and payment, the GRA expects to reduce non-compliance that often arises from fear, misunderstanding, or administrative difficulty.

To support the implementation of the scheme, the GRA has deployed digital tools that allow taxpayers to register, file, and pay taxes with minimal friction. Registration can be completed using basic identification and business details, while payments can be made through mobile money platforms. This digital-first approach is intended to align tax administration with everyday financial practices already familiar to informal sector operators.

In parallel with the introduction of the MTS, the GRA has launched a sustained tax education programme scheduled to run over several years. The initiative targets markets, trade associations, educational institutions, and online platforms, with the objective of embedding tax education into public consciousness. The Authority believes that long-term compliance is more likely when taxpayers understand not only how taxes are paid, but why they matter.

Government officials present at the launch endorsed the initiative, noting that the informal sector accounts for a significant share of economic activity and employment in Ghana. Improving compliance within this segment is therefore seen as essential to strengthening domestic revenue mobilisation and reducing pressure on a narrow base of formal taxpayers.

The Modified Taxation Scheme reflects a broader shift in Ghana’s tax policy toward inclusivity and administrative efficiency. By lowering barriers to compliance and emphasising education over enforcement, the GRA aims to foster a cooperative relationship between taxpayers and the tax system—one in which compliance is driven by clarity and trust rather than coercion.