Ghana proposes simplifying taxation for small companies
The Ghana Revenue Authority has proposed extending the Modified Taxation Scheme (MTS) to small limited liability companies with annual turnover of up to 750,000 Ghanaian cedis. The initiative is intended to give such companies access to a simplified tax regime, which is currently used mainly by individuals and sole proprietors.
The policy direction was announced by Elsie Appau-Klu, technical adviser to the Commissioner-General of the Ghana Revenue Authority and chair of the MTS committee. She spoke on behalf of Commissioner-General Anthony Kwasi Sarpong at a stakeholder meeting in Accra on September 9, MyJoyOnline reports.
Supporting the formalization of small businesses
According to Appau-Klu, expanding the scheme is necessary because young people and women are being encouraged to formally register businesses as limited liability companies, even though their businesses remain small. Under the current application of the Income Tax Act, such companies may fall under the standard corporate tax regime, with stricter accounting and tax compliance requirements.
The Ghana Revenue Authority believes that excluding small businesses from the simplified regime solely because of their legal form could deter business formalization and create an additional burden for companies with low turnover. Appau-Klu stated that the MTS should not be limited to individuals and sole proprietors.
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Preparing legislative changes
The legal and policy departments of the Ghana Revenue Authority have been instructed to work with the Ministry of Finance on the necessary legislative changes. This concerns directly establishing the possibility of participation in the scheme for small companies that meet the established criteria.
The 750,000-cedi threshold is also intended to align the MTS with the goods registration threshold under the Value Added Tax Act, 2025. The Revenue Authority's roadmap provides for consultations with stakeholders and administrative guidance in the near future, as well as the preparation of proposals for legislative changes by December 2026.
In the future, the Revenue Authority also plans to digitalize the scheme through mobile applications, USSD platforms, and other digital channels for registration, filing returns, and paying taxes. Potential solutions include interfaces in local languages.
