Ghana’s Modified Taxation Scheme (2025): What You Need to Know

In a bid to simplify tax compliance for small businesses and informal sector operators, Ghana has introduced a Modified Taxation Scheme (2025). This system is designed to make tax payments easier, fairer, and more predictable — especially for individuals and micro-enterprises with lower annual turnovers.

If you’re in the informal sector and meet the following conditions, this simplified scheme may apply to you: ✅ You are not a professional (e.g., lawyer, engineer, accountant) ✅ You operate a single business ✅ Your annual income is: • ≤ GHS 20,000 (≈ $1,593) • or between GHS 20,001 and GHS 500,000 (≈ $39,840)

Below is a breakdown of the three key components under the new scheme:

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PTI – Presumptive Tax Based on Instalment

Applicable to businesses with a turnover of ≤ GHS 20,000.

Quarterly payments:

  • GHS 25 → for GHS 5,881–10,000
  • GHS 35 → for GHS 10,001–15,000
  • GHS 45 → for GHS 15,001–20,000

This structure allows micro-entrepreneurs to contribute to national revenue in manageable instalments without the burden of complex accounting.


PTT – Presumptive Tax Based on Turnover

For businesses with turnover between GHS 20,001 and GHS 500,000.

Flat rate: 3% of annual turnover.

Example: If your annual turnover is GHS 100,000, your tax liability will be GHS 3,000.

This approach keeps taxation simple and proportionate to the size of your business, encouraging compliance while maintaining fairness.


MCB – Modified Cash Basis

Designed for businesses with turnover above GHS 20,000 that can track their expenses.

Tax is charged on net income (turnover – expenses).

Example: If your turnover is GHS 120,000 and expenses are GHS 40,000, your taxable income becomes GHS 80,000.

This model benefits slightly larger informal businesses that maintain basic records, aligning them with a more standard tax approach.

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Why It Matters

Ghana’s Modified Taxation Scheme (2025) is a step toward broadening the tax base while recognizing the realities of small and informal businesses. It simplifies compliance, ensures fairness, and helps entrepreneurs contribute meaningfully to national development without excessive administrative burden.

As the informal sector continues to drive much of Ghana’s economy, this reform represents an important move towards a more inclusive and sustainable tax system.

#taxation #tax #business #income #ghana #economy

Source: Bizexcelpartners 

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