The Ghana Revenue Authority (GRA) has rolled out major updates under the Value Added Tax Act, 2025 (Act 1151). These changes, which take effect on January 1, 2026, are designed to simplify the VAT system, promote tax equity, and ease the compliance burden on businesses and households.
Here’s a clear breakdown of the new VAT measures and what they mean for you.
1. VAT Registration Threshold Increased to GH₵750,000
Businesses dealing in goods will now be required to register for VAT only when their annual turnover hits GH₵750,000, up from GH₵200,000.
This major adjustment is expected to reduce pressure on small businesses and allow them to grow before entering the VAT net.
2. COVID-19 Health Recovery Levy Abolished
The COVID-19 levy has been completely removed.
This eliminates an additional tax layer, helping to reduce costs for both consumers and businesses.
3. NHIL & GETFund Levies Re-Coupled for Input Tax Claims
A major improvement in the new structure is the re-coupling of NHIL and GETFund, allowing businesses to claim input tax credits—a flexibility they did not previously enjoy.
4. NHIL & GETFund Now Treated as Input Tax
Both levies will now be treated as input tax deductions, reducing the effective tax burden on businesses.
5. VAT Rate Reduced to 20%
To ease financial stress on households and businesses, the standard VAT rate has been reduced to 20%.
6. VAT Flat Rate Scheme (VFRS) Abolished
The widely used VFRS has been removed and replaced with a unified and more transparent VAT structure.
This change is expected to improve fairness and simplify VAT calculations across industries.
When Do These Changes Take Effect?
The reforms become fully operational on January 1, 2026.
Businesses are advised to review their accounting systems, pricing, invoicing, and compliance processes ahead of the implementation date.
What This Means for You
- Less complex VAT calculations
- More opportunities to claim input tax
- Reduced effective tax pressure
- A fairer, more transparent VAT environment
- Lower administrative burden
These reforms are designed to make compliance easier and strengthen Ghana’s overall tax administration system.
Ready? Contact Us for Assistance
If you need support understanding these changes, updating your systems, or preparing your business for the new VAT structure, we’re here to help.
Reach out today for guidance and smooth compliance.