Mark Badu Aboagye Questions Timeline for VAT Reform, Says ‘We Don’t Know When the Government Will Implement It’

Mark Badu Aboagye, the Chief Executive Officer of the Ghana Chamber of Commerce and Industry (GCCI), has expressed a mixed response to the government’s VAT reform proposals outlined in the 2025 budget. Speaking on Joy News’ PM Express Business Edition on Thursday, March 13, Aboagye acknowledged that while there were some positive aspects of the budget, there remained significant concerns—particularly the uncertainty surrounding the timeline for VAT reforms and the extended financial burden placed on businesses.

Aboagye started by recognizing that the 2025 budget had introduced some potentially beneficial policies that could improve the business environment and productivity. However, he emphasized that the existing tax structure remains a major source of concern for the business community.

One of the significant topics discussed was the removal of the E-Levy, a tax that Aboagye had previously criticized. He described it as “undoubtedly the most nuisance tax that I’ve ever seen in this country.” The E-Levy, which taxed electronic transactions, had a significant impact on both consumption and production, he argued, ultimately stifling business growth. Reflecting on the introduction of the levy, Aboagye recalled that the chamber had voiced concerns from the very beginning, warning that it would not benefit businesses. Though the government had reduced the rate of the E-Levy from its original proposal, Aboagye maintained that its existence continued to be detrimental to the private sector.

“We raised concerns on the very day that the E-Levy was introduced. We clearly indicated that it’s not going to help business. It’s going to help consumers, and to the extent that even the rate was high, through our advocacy, we were able to bring it down to 1%. So, if they are taking it out, for me, I think it’s a fair deal,” Aboagye said.

While he welcomed the removal of the E-Levy, as well as the COVID-19 levy, Aboagye emphasized the critical need for a comprehensive reform of the VAT system. He noted that Ghana’s VAT structure remains too complicated and burdensome for businesses, leading to difficulties in compliance. He pointed out that the combination of standard VAT with additional levies that businesses are unable to claim input tax credits for creates unnecessary costs for businesses.

“Our VAT structure is too complicated. It doesn’t enhance compliance. People don’t even understand a structure where you are combining both the Standard VAT and most of these levies that you cannot claim input on, but which translate into direct costs to businesses,” he explained.

However, Aboagye’s most significant concern was the vague timeline for implementing VAT reforms. He expressed frustration over the government’s failure to provide a specific and clear plan regarding when the changes would occur. With no definitive timeline given, businesses are left uncertain about when or if relief from the high VAT burden will arrive.

“We were expecting a straightforward comment on what exactly they are going to do. But to defer it to a period that we are not even aware of means that, within this time, businesses are still going to be paying the VAT of 22%,” Aboagye lamented. “I don’t know when they are going to take it out.”

Despite his concerns about the VAT system, Aboagye did acknowledge some positive macroeconomic trends, including a potential decrease in inflation. However, he also expressed skepticism about the accuracy of the government’s inflation data and questioned the reliability of other economic indicators.

“Looking at the numbers, the macroeconomic indicators that they put forward—inflation, even though I have issues with it—maybe we’ll get there,” he stated.

As Ghanaian businesses await more clarity on the proposed VAT reforms, Aboagye’s remarks underscore the difficulties that local businesses continue to face under the current tax structure. He stressed the need for decisive policy action and clearer timelines to ensure that the tax environment becomes more predictable and favorable to business growth. Without more certainty, businesses will continue to struggle with the complexities of the tax system, undermining their ability to operate efficiently and contribute to the country’s economic growth.