GRA introduces 3% flat tax for SMEs under new modified taxation scheme

In a landmark initiative to support small and medium enterprises (SMEs) and enhance domestic revenue, the Ghana Revenue Authority (GRA) has launched a 3% flat tax under the newly introduced Modified Taxation Scheme (MTS).

The initiative is part of a broader effort to simplify tax compliance, promote fairness, and strengthen the national tax system.

The launch brought together government officials, development partners, representatives of the business community, civil society stakeholders, and media personnel at the Movenpick Ambassador Hotel in Accra.

His Excellency John Dramani Mahama, President of the Republic of Ghana, led the proceedings, emphasizing trust, transparency, and voluntary compliance as the foundation of a robust tax culture.

Delivering the keynote address on behalf of the President, Chief of Staff Hon. Julius Debrah, highlighted the significance of the initiative for Ghana’s economic growth and fiscal stability.

“The Modified Taxation Scheme and the Sustained National Tax Education Campaign (SNTEC) are critical steps toward modernising our tax system, broadening the tax base, and ensuring that every citizen and business understands their civic and fiscal responsibilities,” he stated.

President Mahama stressed that the Government is committed to building a culture where taxation is viewed as a civic investment rather than a burden.

“We must all understand that paying taxes is a shared responsibility and a vital part of nation-building,” he said. “It is about what we can contribute to our country, not just what our country can do for us.”

The President also revealed that the Ministry of Finance had issued directives to suspend all service agreements between the Ghana Revenue Authority (GRA) and the Strategic Mobilisation Unit pending the conclusion of investigations by the Office of the Special Prosecutor.

He stressed that this step was necessary to reinforce public trust and ensure accountability in revenue mobilisation.

Highlighting the role of taxes in national development, President Mahama said, “Revenue mobilisation is the backbone of our economy. It determines our ability to invest in infrastructure, social programmes, and economic stability. Strengthening the GRA is therefore critical to ensuring Ghana’s fiscal resilience in these challenging times.”

The President underscored that the 3% flat tax is aimed at easing the burden on micro and small enterprises, enabling them to operate with minimal compliance difficulties.

He elaborated, “This simplified tax rate will allow SMEs earning up to GH¢500,000 annually to register, file, and pay their taxes efficiently through a digital platform linked with the Ghana Card and GPS address system.”

He also stressed the importance of tax education in fostering voluntary compliance. “A well-informed taxpayer is a compliant taxpayer. By educating citizens about their obligations, rights, and the benefits of contributing to the national coffers, we ensure that taxation is understood and respected,” the President said.

Hon. Seth Terkper, Economic Advisor to the President and former Minister of Finance, provided insight into the Modified Taxation Scheme. He explained that the initiative is the result of a decade-long effort to make income taxation more inclusive and simpler, particularly for small businesses. “The scheme replaces the old presumptive income tax model. It simplifies compliance, strengthens administration, and ensures that small enterprises are not overwhelmed by complex tax obligations,” he said.

Adding to this, Hon. Elizabeth Ofosu-Agyare, Minister for Trade, Agribusiness and Industry, applauded the initiative, emphasizing its potential to stimulate economic growth. “By reducing compliance challenges and making tax obligations more predictable, SMEs can focus on growth, job creation, and innovation,” she stated.

Hon. George Kweku Ricketts-Hagan, Board Chairman of the Ghana Revenue Authority, provided a detailed perspective on the operational readiness of the GRA to implement the scheme. He highlighted that the Authority has made substantial investments in staff training, digital infrastructure, and stakeholder engagement. “Our objective is to ensure that every taxpayer, from the smallest trader to larger enterprises, can comply easily and efficiently. The Modified Taxation Scheme reflects our commitment to fairness, transparency, and service excellence,” he said.

Mr. Ricketts-Hagan also emphasized the role of collaboration between the Board, the Acting Commissioner-General, and other stakeholders in ensuring the successful roll-out of the initiative. He noted that the GRA is prepared to implement the programme nationwide, with special attention to continuous taxpayer education and engagement.

Delivering the vote of thanks, Ms. Elsie Appau-Klu, Technical Advisor to the Commissioner-General and Programme Coordinator of the Sustained Tax Education Programme, expressed appreciation to all stakeholders for their support.

She stressed that Acting Commissioner-General Mr. Anthony Sarpong and his team are fully committed to the programme’s implementation.

“We have trained staff, upgraded systems, and embraced digital solutions to ensure that all taxpayers can comply seamlessly with the new taxation framework,” she said.

The Sustained National Tax Education Programme will be rolled out over three years, combining community outreach, media campaigns, and stakeholder partnerships to ensure broad awareness and voluntary compliance.

The Modified Taxation Scheme, with its 3% flat tax for SMEs, is expected to transform Ghana’s economic landscape by simplifying compliance, encouraging formalisation of informal businesses, and increasing domestic revenue sustainably.

With the twin initiatives — the 3% flat tax under the Modified Taxation Scheme and the Sustained National Tax Education Campaign — the Government is laying the foundation for a modern, fair, and transparent tax system that empowers SMEs and strengthens national development.

Source:Joseph Kobla Wemakor