By Adnan Adams Mohammed
Small incorporated enterprises across Ghana could soon transition from complex corporate tax frameworks to a simplified tax regime.
This follows a policy proposal by the Ghana Revenue Authority (GRA) to extend the Modified Taxation Scheme (MTS) to qualifying small limited liability companies with an annual turnover of up to GH¢750,000.
The initiative represents a major administrative shift aimed at aligning the tax environment with the operational realities of small and growing businesses, ensuring that young entrepreneurs and women who formalize their ventures are not burdened by strict corporate compliance requirements.
Speaking on behalf of the Commissioner-General of the GRA, Anthony Kwasi Sarpong, at an MTS stakeholder workshop in Accra on September 9, Technical Advisor and Chairperson of the MTS Committee, Elsie Appau-Klu, emphasized the urgency of modernizing the framework.
“The MTS should not be limited to individuals and sole proprietors,” Appau-Klu stated, announcing the Authority’s policy stance that small corporate entities meeting the GH¢750,000 threshold ought to be included in the simplified regime.
Under current income tax regulations, the MTS has primarily applied to individual operators and sole proprietorships. Consequently, micro-enterprises that choose to incorporate as limited liability companies are automatically subjected to standard corporate tax obligations, complex accounting standards, and stringent reporting procedures.
Appau-Klu noted that the current exclusion creates unintended barriers to formalization, particularly as government agencies encourage youth and women-led enterprises to adopt formal corporate structures.
“We want a Ghana where a small business is not punished for becoming formal,” she stressed, adding that small incorporated entities—such as bakeries, salons, laundries, carpentry workshops, and retail outlets—should be permitted to access simplified tax filing options as long as their turnover stays under the proposed limit.
To implement the changes, the GRA’s legal and policy units have been tasked with collaborating with the Ministry of Finance to draft the required statutory amendments. The proposed GH¢750,000 threshold is also intended to harmonize the MTS with the registration benchmark under the Value Added Tax Act, 2025 (Act 1151), establishing operational consistency across national revenue collection frameworks.
The Authority’s policy timeline foresees ongoing stakeholder consultations and administrative directives in the immediate term, leading to formal legislative proposals submitted to Parliament by December 2026.
Looking ahead, the GRA plans to fully digitize the MTS infrastructure using mobile platforms, USSD channels, and localized interfaces to simplify business registration, filing, and payments. The Authority aims to ensure that tax compliance grows alongside emerging enterprises rather than acting as a barrier to initial formalization.
