Ghana Introduces Major VAT Reforms Under New VAT Act, Effective January 2026

The Government of Ghana has announced sweeping reforms to the country’s Value Added Tax (VAT) system following the passage of the Value Added Tax Act, 2025 (Act 1151). The new law, which takes effect on January 1, 2026, is aimed at simplifying VAT administration, reducing the tax burden on businesses and households, and improving voluntary tax compliance.

In a notice issued to all VAT-registered taxpayers and the general public, the Ghana Revenue Authority (GRA) outlined several key changes under the new Act.

One of the major reforms is an increase in the VAT registration threshold for businesses dealing in goods. The threshold has been raised significantly from GH¢200,000 to GH¢750,000, a move expected to reduce compliance pressure on small and medium-sized enterprises.

The Act also abolishes the COVID-19 Health Recovery Levy, which was introduced during the pandemic to support health sector financing. This removal is expected to provide relief to consumers and businesses alike.

Additionally, the National Health Insurance Levy (NHIL) and the Ghana Education Trust Fund (GETFund) levies have been re-coupled, allowing taxpayers to claim input tax credits. Under the new arrangement, both NHIL and GETFund levies will now be treated as allowable input tax deductions, enhancing transparency and efficiency within the VAT system.

In another significant change, the standard VAT rate has been reduced to 20 percent. Government says this reduction is intended to ease the tax burden on households and businesses while supporting economic growth.

The VAT Flat Rate Scheme (VFRS) has also been abolished, paving the way for a unified VAT structure. Authorities believe this will create a more transparent and equitable system for taxpayers across various sectors.

The GRA has urged VAT-registered taxpayers, employers, accountants, auditors, importers, exporters, clearing agents, and tax consultants to familiarize themselves with the new provisions ahead of the implementation date.

According to the Authority, the reforms are designed to promote equity, improve administrative efficiency, and strengthen voluntary tax compliance nationwide.

For further information or clarification, members of the public have been advised to visit the nearest Taxpayer Service Centre, call the GRA toll-free line on 0800 900 110, contact the GRA via WhatsApp on 055 299 0000 or 020 063 1664, or send inquiries to info@gra.gov.gh.