60% of Ghana's businesses dodge VAT remittance, GRA warns of crackdown

Ghana's tax authority has sounded the alarm over a widespread problem threatening domestic revenue collection: the majority of businesses are failing to properly account for Value Added Tax, even as they collect it from customers.

According to the Ghana Revenue Authority (GRA), only four out of every ten businesses in Ghana are correctly charging and remitting VAT to the government. The remaining six either avoid registration altogether or collect VAT from customers without passing the funds to the state—a practice that undermines efforts to strengthen the nation's domestic revenue base.

Commissioner-General Anthony Kwasi Sarpong made the disclosure at the 14th Annual International Tax Conference 2026, describing the compliance gap as a significant barrier to revenue mobilisation. "Four out of every ten businesses in Ghana correctly charge VAT," he stated. "The remaining six do not register, or when they register, they collect money that does not end up with government."

Technology and enforcement: the GRA's dual approach

In response to the crisis, the GRA is deploying a two-pronged strategy combining digital innovation with tighter compliance measures. The cornerstone of this effort is the Fiscal Electronic Devices Act, which will require most businesses to conduct transactions through government-approved electronic devices. The system is designed to give the GRA real-time visibility into economic activity and enable monthly VAT reconciliation.

However, early results from pilot programmes suggest businesses are already finding ways to circumvent the technology. Sarpong revealed a troubling pattern: "When our officers are on the field, the machine is working. As soon as we leave the shop, the machine stops working." This indicates that enforcement officers must maintain ongoing presence and vigilance to ensure compliance, a resource-intensive challenge for the Authority.

The GRA has acknowledged that technology alone cannot solve the problem and is therefore pairing digital systems with intensified compliance operations. "We are combining this with strong compliance to ensure that compliance and the use of technology will help us to improve VAT on the ground," Sarpong said.

Why it matters for Ghana

VAT is one of Ghana's largest revenue sources, and the 60% non-compliance rate represents a substantial loss to the public purse. When businesses pocket VAT meant for the government, it directly reduces funding available for critical services including healthcare, education and infrastructure. The revenue gap also places greater pressure on other tax categories and may justify higher tax rates for compliant businesses.

For honest businesses and consumers, the current system creates unfair competition. Compliant firms bear the cost of remittance while non-compliant rivals keep the collected VAT, undercutting prices or inflating profits. Closing this loophole should improve market fairness and incentivise broader VAT registration.

The GRA's enforcement push also signals a broader government commitment to tackling the informal economy, which remains substantial in Ghana. As the Authority implements electronic monitoring and field operations intensify, businesses should expect greater scrutiny. Companies operating in sectors prone to non-compliance—retail, hospitality, informal trading—may face particular pressure to formalise and register.

The challenge ahead is substantial: embedding technology across thousands of small and medium enterprises while building institutional capacity to monitor and enforce compliance. Success will require not only investment in systems but also cooperation from business associations, training for traders, and credible penalties for persistent offenders.