Shorttitle The most central activity of any state is the raising of tax revenues in order to achieve fiscal policy objectives of matching expenditure and reducing budget deficit.The Government of Ghana in the quest to mobilise more revenue introduced the Value Added Tax in March 1995, but had to withdraw it barely after three months of operations as a result of public outcry against the tax. The adoption of VAT worldwide as a modern and efficient mode of collecting indirect taxes makes it imperative for Ghana to repackage and re-introduce the tax in 1998.The main purpose of this research was to investigate the challenges that inhibit VAT revenue collection enhancement and suggest recommendations for improving its collection. The study revealed that effective tax education and monitoring, fair application of tax rules and regulations, efficient information systems, and among others, impact positively on tax compliance and increase revenue collection.