This paper examines two distributional aspects of Ghana’s Value Added Tax: the distribution of burden and benefits from VAT exemptions across different households, and the changes in prices of consumer goods across different consumption expenditure items. The results show that the VAT regime has evolved from being progressive to regressive. Strikingly, poor households have increased their expenditure on telecommunication, transport, housing and utilities despite the increase in prices. In terms of policy, the study concludes that the current exemptions are not well targeted considering the shifts in expenditure components over time. The government may either abolish them completely or shift the emphasis to reflect the consumption dynamics.
