The Ghana Revenue Authority (GRA) has announced sweeping reforms to the country’s Value Added Tax (VAT) system, including a reduction in the standard VAT rate, the abolition of the COVID-19 Health Recovery Levy, and the scrapping of the VAT Flat Rate Scheme, effective January 1, 2026.
The changes, contained in an official notice to VAT-registered taxpayers, follow the passage of the Value Added Tax Act, 2025 (Act 1151), which seeks to simplify the tax regime and reduce the burden on businesses and households.
Under the new law, the core VAT rate has been reduced to 20 percent. The GRA said the measure is intended to ease cost pressures on consumers while supporting business growth.
In a major relief for small and medium-sized enterprises, the authority has also significantly raised the VAT registration threshold for businesses dealing in goods. The threshold has been increased from GH¢200,000 to GH¢750,000, a move expected to exempt thousands of small traders from mandatory VAT registration.
The reforms further abolish levies introduced in recent years. According to the GRA, the COVID-19 Health Recovery Levy has been scrapped entirely. In addition, the National Health Insurance Levy (NHIL) and the Ghana Education Trust Fund (GETFund) levy have been re-coupled to allow businesses to claim input tax credits. Both levies will now be treated as deductible input taxes.
Another key change is the discontinuation of the VAT Flat Rate Scheme, which previously applied to retailers. The GRA said the scheme has been abolished in favour of a unified VAT structure aimed at improving transparency and administrative efficiency.
The authority said the reforms are designed to simplify the VAT system, promote equity, enhance compliance, and improve tax administration.
The notice was addressed to the general public, particularly VAT-registered taxpayers, employers, accountants, auditors, importers, exporters, clearing agents, and tax consultants. The GRA advised taxpayers seeking further clarification to contact their nearest Taxpayer Service Centre or use the authority’s toll-free lines, WhatsApp numbers, or official email channels.
The notice was issued under the authority of the Commissioner-General.
Source: www.kumasimail.com
