Sweeping changes are on the horizon for Ghana’s Value Added Tax (VAT) system, following the passage of the Value Added Tax Act, 2025 (Act 1151), which will come into force on January 1, 2026.
The Ghana Revenue Authority (GRA) announced the reforms in a notice to VAT-registered taxpayers and the public, promising a new era of simplicity, equity, and efficiency in tax administration.
According to the GRA, the new law introduces a host of measures designed to ease the tax burden on businesses and households while boosting compliance. Among the most notable changes is a significant increase in the VAT registration threshold for businesses dealing in goods, from GHS 200,000 to GHS 750,000. This move is expected to bring substantial relief to micro and small-scale enterprises, reducing their compliance burden and freeing them from VAT obligations.
In a further effort to streamline the tax regime, the Act abolishes the COVID-19 Health Recovery Levy, eliminating an extra cost that had been introduced during the pandemic era. The National Health Insurance Levy (NHIL) and the Ghana Education Trust Fund (GETFund) levy have also been re-coupled, meaning businesses can now claim input tax credits on these levies. By treating both NHIL and GETFund as deductible input taxes, the GRA aims to enhance fairness and transparency throughout the VAT system.
A major highlight of the reforms is a reduction of the VAT rate to 20 percent, a measure specifically intended to lighten the load for households and businesses and stimulate economic activity. The VAT Flat Rate Scheme (VFRS) has also been abolished, paving the way for a unified VAT structure that the Authority says will be more transparent and easier to administer.
The GRA emphasized that these reforms are designed to simplify the VAT system, promote equity, improve administrative efficiency, and encourage voluntary compliance. Taxpayers and professionals, including employers, accountants, auditors, importers, exporters, clearing agents, and tax consultants, are urged to familiarize themselves with the new provisions ahead of implementation in January 2026.
For further information, the Authority advised the public to consult their nearest Taxpayer Service Centre or reach out via the GRA’s toll-free lines, WhatsApp platforms, or official email channels.
Reaffirming its dedication to integrity, fairness, and service, the GRA underscored that these reforms are part of broader efforts to strengthen domestic revenue mobilisation in support of national development, under the theme “Our Taxes, Our Future.
Source: Apexnewsgh.com
