Ghana’s domestic value-added tax (VAT) collections and retail sales recorded strong growth in the first five months of 2025, signalling a rebound in consumer demand and improved tax compliance, according to the Bank of Ghana’s July 2025 Monetary Policy Report.

The report showed that domestic VAT collections rose by 33.6 percent to GH¢8.31 billion between January and May 2025, up from GH¢6.22 billion during the same period in 2024.

Similarly, retail sales increased by 35.7 percent cumulatively over the period, reflecting growing household spending and a sustained recovery in private consumption.

On a year-on-year basis, sales for May alone jumped 38.6 per cent to GH¢277.62 million, compared to GH¢200.27 million recorded in May 2024. Month-on-month, retail activity also grew by 4.6 percent, rising from GH¢265.46 million in April to GH¢277.62 million in May.

The central bank attributed the upward trend in VAT collections and retail trade performance to enhanced economic activity, stronger consumer confidence, and improved tax administration.

Domestic VAT for May alone amounted to GH¢1.77 billion, representing a 30.1 percent year-on-year increase.

According to the Bank of Ghana, the surge in consumer spending reflects a gradual rebound in domestic demand, supported by relatively stable prices and modest growth in disposable incomes.

Economic analysts believe the performance of VAT and retail indicators suggests a more buoyant domestic economy than in 2024, following months of macroeconomic stability and a strengthening cedi.

However, they caution that sustaining this growth momentum will depend on the government’s ability to maintain fiscal discipline, manage inflationary pressures, and strengthen measures that protect household purchasing power.

The Bank of Ghana’s report noted that while the data show clear signs of recovery in consumer activity, continued policy consistency and private-sector support will be essential to consolidate gains and drive broad-based growth.