The Ghana Revenue Authority (GRA) has begun enforcing a set of new tax policies from July 1, 2025, prompting concerns over rising prices across the country. Key among these reforms is a modified tax structure aimed at informal sector workers and the introduction of a 5% excise tax on locally manufactured plastic goods, as well as a 15% levy on non-life insurance premiums. While the Ghanaian cedi has remained relatively stable, offering temporary relief in prices, the newly introduced taxes are likely to offset those gains.
Plastic manufacturers have raised alarm over the direct impact of the excise tax on consumers. According to Ebbo Botwe, President of the Plastic Manufacturers Association, the entire tax burden will be passed on to end users, given the nature of excise taxes. He warned that increased consumer costs could hurt demand and ultimately threaten the survival of businesses. The new levy is expected to affect a broad range of everyday products made from plastic.
The effects of the tax hikes are already beginning to ripple through the informal economy, especially in the food sector. Local food vendors report they may be forced to raise meal prices by one to two cedis per plate to remain profitable. Vendors argue that they are unable to absorb the additional costs imposed by their suppliers, most of whom are also affected by the plastic tax. This would place an additional burden on low-income consumers who rely on affordable street food.
Under the updated tax regime, informal workers earning below GHS 20,000 annually are now expected to pay quarterly fixed taxes of GHS 25 or GHS 45. However, some market traders are demanding a more tailored approach, citing differences in daily turnover and shop sizes. Traders argue that a flat-rate tax fails to reflect the diverse financial realities of informal businesses and could lead to non-compliance or unfair burdens on the smallest operators.
Tax expert Francis Timore Boi has endorsed the reforms as a necessary move to broaden Ghana’s tax base but questioned the implementation timeline. With only six months remaining in the fiscal year, he believes the government may struggle to meet its revenue targets. He emphasized that strong public education is essential to ensure compliance and stressed that improving tax collection efficiency could allow for a reduction in overall tax rates, helping to stabilize Ghana’s fiscal landscape in the long term.
Source: Citi newsroom