m BAWUMIA MEETS GUTA OVER HIGH IMPORT DUTIES, 20% VAT AND DEMURRAGE COSTS

The meeting also addressed concerns over foreign nationals operating in Ghana’s retail trade, expensive shop rentals and goodwill payments, as traders presented proposals to ease the cost of doing business and improve their operations. In a Facebook post, Dr Bawumia said the discussions provided an opportunity for GUTA executives and representatives to outline the difficulties facing their members and suggest possible solutions. “They raised concerns about high import duties and demurrage costs, the increase of VAT for informal sector operators to 20%, the lack of access to EXIM loans, foreigners taking over the retail trade, high cost of rent and Goodwill payment for shops, etc.,” he wrote. Demurrage charges, which can accumulate when imported goods remain at ports beyond the permitted free-storage period, are a major concern for importers because they add to the overall cost of bringing goods into the country. The concerns raised by GUTA also come amid ongoing debate over Ghana’s VAT regime. Under the Value Added Tax Act, 2025 (Act 1151), which took effect on January 1, 2026, the effective VAT rate is 20%, comprising a 15% VAT rate, a 2.5% National Health Insurance Levy and a 2.5% Ghana Education Trust Fund Levy. The reforms also abolished the 1% COVID-19 Health Recovery Levy and raised the VAT registration threshold for businesses dealing in goods from GH¢200,000 to GH¢750,000. These changes were intended to simplify the tax system and reduce the burden on businesses and consumers. However, GUTA has raised concerns about the practical challenges of implementing the new regime, particularly for informal sector traders who may struggle with the calculations and administrative requirements. Beyond taxation and import costs, access to financing emerged as another issue during the meeting, with traders expressing concern about difficulties obtaining loans through the Export-Import Bank of Ghana (EXIM Bank). Limited access to affordable credit can constrain traders’ ability to import stock, expand their businesses and invest in local production. The association also raised concerns about foreign nationals’ involvement in the retail trade, an issue linked to the enforcement of laws governing business activities reserved for Ghanaian citizens. High shop rents and goodwill payments were also cited as financial pressures facing traders seeking to establish or maintain retail outlets. Dr Bawumia said the meeting went beyond identifying challenges, with both sides discussing proposals to address the problems and create incentives for traders to shift from importing finished products to manufacturing goods locally. “The discussions were eye-opening and GUTA also came with proposals to resolve some these challenges,” he stated. “We also discussed the importance of transitioning from just importing to producing these goods in Ghana and the incentives to encourage them to do so.” A stronger domestic manufacturing base could help reduce reliance on imported finished goods, create employment and support value addition, although achieving this transition would require access to financing, reliable infrastructure, competitive production costs and a supportive business environment. Dr Bawumia described the engagement as productive and thanked GUTA for meeting with him. “It was a very productive meeting and my thanks to GUTA for this meeting,” he added. The meeting comes as the cost of doing business, taxation, access to credit and the protection of Ghanaian-owned enterprises remain important issues in discussions about the country’s trading environment. Credit: ghanaweb.com