The Ghana Revenue Authority (GRA) announced a policy shift to extend its Modified Taxation Scheme (MTS) to qualifying small limited liability companies with an annual turnover of up to GH¢750,000. This move aims to make the tax system more responsive to the realities of small businesses.
Under the current Income Tax Act, the MTS has largely applied to individuals and sole proprietors. Small businesses that adopt a corporate structure may therefore face the standard corporate tax regime, with stricter accounting and compliance demands. The proposed reform would allow eligible businesses—whether operating as individuals, sole proprietorships, partnerships or limited liability companies—to benefit from a simplified tax regime.
Commissioner‑General Anthony Kwasi Sarpong delivered the policy direction through his Technical Advisor and Chairperson of the MTS Committee, Elsie Appau‑Klu, at an MTS stakeholder workshop in Accra on September 9. The workshop, organised by Eban Capital, the Association of Small Scale Industries (ASSI), the Microfinance and Small Loans Centre (MASLOC), the Youth Employment Agency (YEA) and the GRA, highlighted the need for the expansion.
Appau‑Klu noted that many young people and women register their businesses as limited liability companies even when operations remain very small. “The MTS should not be limited to individuals and sole proprietors,” she said, announcing the Authority’s position that qualifying small businesses with annual turnover not exceeding GH¢750,000 should ultimately be eligible for the simplified regime.
The GRA’s Legal and Policy teams have been instructed to collaborate with the Ministry of Finance on the necessary legislative amendments to make the inclusion of qualifying small companies explicit. The GH¢750,000 threshold also aligns the MTS with the registration threshold for goods under the Value Added Tax Act, 2025 (Act 1151), creating greater consistency across the tax framework.
Appau‑Klu explained that the policy would allow businesses such as salons, laundries, bakeries, carpentry shops and provision stores operating as limited liability companies to access the simplified tax framework if their annual turnover remains below the proposed threshold. The Authority’s roadmap includes stakeholder engagement and administrative guidance in the immediate term, followed by proposals for legislative amendments by December 2026.
In the longer term, the GRA plans to digitise the MTS through mobile applications, USSD platforms and other digital channels to simplify registration, filing and tax payments, including potential use of local‑language interfaces. “We want a Ghana where a small business is not punished for becoming formal,” Appau‑Klu said, calling for stronger collaboration among business associations, enterprise‑support agencies and the GRA to help small businesses grow while gradually adapting their tax obligations as their operations expand.
The proposed reform is expected to strengthen the link between business formalisation and tax compliance, ensuring entrepreneurs can choose corporate structures without automatically losing access to simplified taxation.
