Domestic VAT collections for the first five months of 2025 increased by 33.6 percent to GH¢8.31 billion, compared to GH¢6.22 billion during the same period in 2024.
According to the Bank of Ghana’s July Monetary Policy Report, which, in addition to highlighting the VAT increase, also indicates robust growth in retail sales during the same period.
This development suggests heightened consumer demand and enhanced tax compliance.
The report reveals that retail sales experienced a cumulative increase of 35.7 percent from January to May 2025, underscoring the rise in household expenditure and the recovery of private consumption.
On a year-on-year basis, sales for May alone surged by 38.6 percent to GH¢277.62 million, up from GH¢200.27 million in May 2024. Month-on-month, retail activity saw an improvement of 4.6 percent, increasing from GH¢265.46 million in April to GH¢277.62 million in May.
Domestic VAT collections also demonstrated strong performance in May, rising by 30.1 percent year-on-year to GH¢1.77 billion. This growth can be linked to the upward trend in both VAT and retail sales, driven by enhanced economic activity, increased consumer confidence, and improved tax administration.
According to the data, the rise in consumer spending indicates a gradual recovery in domestic demand, bolstered by stable prices and moderate growth in disposable incomes.
Nevertheless, market analysts contend that maintaining this positive trend will rely on upholding fiscal discipline, controlling inflationary pressures, and reinforcing policy measures to support household purchasing power.
