The Ghana Revenue Authority (GRA) has announced far-reaching reforms to the country’s Value Added Tax (VAT) system following the passage of the Value Added Tax Act, 2025 (Act 1151), which takes effect on January 1, 2026.
In a notice to VAT-registered taxpayers, the Authority said the reforms are intended to simplify VAT administration, strengthen compliance, and reduce the tax burden on households and businesses.
A key change is the increase in the VAT registration threshold for goods-trading businesses from GH¢200,000 to GH¢750,000, a move expected to exempt many small businesses from mandatory VAT registration.
The GRA also announced the abolition of the COVID-19 Health Recovery Levy, introduced during the pandemic to support government spending.
Under the revised framework, the National Health Insurance Levy (NHIL) and GETFund levy have been re-coupled into the VAT system, allowing businesses to claim input tax credits on both levies.
Additionally, the VAT rate has been reduced to 20 per cent, a measure aimed at easing cost pressures on consumers and improving business competitiveness.
The reforms further scrap the VAT Flat Rate Scheme (VFRS), replacing it with a unified VAT structure designed to improve transparency and administrative efficiency.
According to the GRA, the changes are expected to promote equity in the tax system and encourage voluntary compliance. Stakeholders, including businesses, employers, accountants, importers, exporters, and tax consultants, have been urged to take note ahead of the rollout.
The Authority also encouraged the public to seek clarification through its Taxpayer Service Centres, toll-free lines, or official communication platforms.
