IMANI Flags Tax Loophole in New VAT Reforms, Warns of Unfair ‘Missing Middle’ Zone

IMANI Africa has identified a loophole in Ghana’s new VAT reforms affecting businesses earning between GH¢500,000 and GH¢750,000 annually.
These businesses fall outside both the small-business tax (3% for up to GH¢500,000) and the standard VAT (20% for above GH¢750,000), leaving them with no clear tax obligation.
The loophole could result in some businesses paying no consumption tax, creating unfair competition and encouraging under-reporting of sales.
IMANI warns this gap could cost the country revenue and urges the government to clarify or adjust the tax rules to cover all income brackets.

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.