The COVID-19 Health Recovery Levy is set to be scrapped, with the overall VAT rate also due for a cut under sweeping tax reforms aimed at easing pressure on businesses and simplifying Ghana’s tax system.
Presenting the 2025 Mid-Year Fiscal Policy Review to Parliament, Finance Minister Dr. Cassiel Ato Forson said the reforms will also reduce the effective VAT rate, eliminate cascading levies related to the GETFund and NHIS, and remove the VAT flat rate scheme. Additionally, the VAT registration threshold will be increased to exempt small and micro enterprises, while compliance will be strengthened through the introduction of electronic fiscal devices and intensified public education.
“These reforms will simplify the tax system, improve compliance, and provide relief to businesses, especially micro and small enterprises,” Dr. Forson told lawmakers.
The VAT overhaul follows technical consultations with the International Monetary Fund (IMF) and forms part of broader fiscal consolidation efforts outlined by the Mahama-led administration. A new VAT bill, based on ongoing nationwide consultations with trade and business stakeholders, is expected to be tabled in Parliament by October 2025 as part of the 2026 budget process.
Dr. Forson also announced that the government will withdraw tax exemptions on marine gas oil, citing systemic abuse and revenue losses estimated at nearly half a billion cedis. “The tax exemptions have created incentives for abuse,” he said.
In response to a GH¢1.6 billion revenue shortfall in customs collections during the first half of 2025, the government will deploy artificial intelligence tools to monitor import valuations and roll out an Advanced Cargo Information (ACI) system. These measures, he explained, are intended to reduce human interference, improve transparency, and address revenue leakages at Tema Port and across Ghana’s land borders.
The finance minister emphasized that the reforms are designed to boost domestic revenue without placing undue pressure on the average Ghanaian. “We are determined to broaden the tax base and boost compliance through technology and stakeholder engagement—not arbitrary increases,” he said.
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