Ghana’s new VAT regime has officially come into force, marking one of the most far-reaching tax changes in recent years.
From January 1, the Ghana Revenue Authority began implementing the Value Added Tax Act, 2025 (Act 1151), a reform package aimed at simplifying VAT, easing pressure on businesses and households, and improving fairness across the tax system.
One of the most noticeable changes is the sharp increase in the VAT registration threshold. Businesses dealing in goods are now required to register for VAT only when their annual turnover reaches GH₵750,000, up from the previous GH₵200,000. For many small and growing enterprises, this provides immediate relief, allowing them to operate and expand without the administrative and cash-flow challenges that often come with early VAT registration.
The new law has also brought an end to the COVID-19 Health Recovery Levy. With its removal, an extra layer of tax that had lingered since the pandemic is gone, reducing costs for consumers and lowering operating expenses for businesses across the economy.
Significant changes have also been made to how input tax is treated. The National Health Insurance Levy and the GETFund Levy have been re-coupled and are now recognised as input tax. This allows businesses to claim input tax credits on these levies, a long-standing concern under the old system. The adjustment is expected to reduce the effective tax burden on compliant businesses and improve their cash flow.
At the same time, the standard VAT rate has been reduced to 20 percent, offering some relief to households already stretched by the cost of living. The widely used VAT Flat Rate Scheme has been abolished, replaced with a single, unified VAT structure designed to make calculations clearer and the system more transparent across all sectors.
With the reforms now in effect, businesses are expected to have updated their accounting systems, pricing, and invoicing processes to align with the new law. For many taxpayers, the early days of 2026 bring a VAT system that is less complex, more balanced, and easier to comply with, as the GRA positions the reforms as a foundation for stronger and more efficient tax administration in Ghana.
