Ghana is losing nearly 60 per cent of its potential Value Added Tax (VAT) revenue due to inefficiencies, Thomas T. K. Agorsor, Head of the Domestic Tax Revenue Division (DTRD) Free Zones Office of the Ghana Revenue Authority (GRA), has announced.

Speaking at a media engagement organised by the Ghana Ports and Harbours Authority (GPHA) on the theme: “GRA’s New VAT Reforms and Their Implications for Businesses and Consumers in 2026”, Mr Agorsor also attributed the gap to non-compliance within the tax system.

He explained that although VAT has been in existence in Ghana for about 27 years, multiple amendments over the years—particularly the decoupling of levies from the main VAT regime—have complicated compliance and widened the tax gap.

According to him, the practice of charging levies separately before imposing VAT resulted in a “tax-on-tax” effect, which pushed up prices of goods and services and increased resistance to compliance.

“This meant businesses could not reclaim input tax on levies, turning them into business costs that were eventually passed on to consumers,” he stated.

Mr Agorsor said the comprehensive VAT reform initiated by the Ministry of Finance seeks to consolidate all amendments under a single, clear law to improve certainty, reduce complexity, and enhance revenue mobilisation.

He noted that narrowing the VAT compliance gap to about 20 per cent would significantly improve Ghana’s tax-to-GDP ratio, which the government aims to raise from about 13 per cent to 16 per cent.

He added that reviewing Ghana’s extensive list of tax exemptions was also critical, as exemptions continue to erode potential revenue.