The Ghana Revenue Authority (GRA) has issued clarification on the new 20% Value Added Tax (VAT) rate, effective January 1, 2026, under the Value Added Tax Act, 2025 (Act 1151).
This unified rate combines a 15% standard VAT with 2.5% National Health Insurance Levy (NHIL) and 2.5% Ghana Education Trust Fund (GETFund) levy. According to a GRA release cited by the Ghana News Agency, the change simplifies the tax system, cuts effective rates from a previous high of 21.9% due to cascading levies, and eases burdens on consumers and businesses.
Key reforms include abolishing the 1% non-recoverable COVID-19 Health Recovery Levy and re-coupling NHIL and GETFund with the VAT base. Registered taxpayers can now claim input tax credits on these levies, eliminating “tax on tax” effects that drove up costs.
The GRA also raised the VAT registration threshold for goods dealers to GH₵750,000 in annual turnover, up from GH₵200,000. “This exempts thousands of micro and small enterprises from compliance burdens, boosting their competitiveness,” the release stated.
Commissioner-General Anthony Sarpong urged taxpayers to update invoicing systems, including Fiscal Electronic Devices (FEDs), to reflect the 20% rate. He emphasized the GRA’s commitment to tax compliance for 2026 revenue targets, noting the abolition of the VAT Flat Rate Scheme for greater transparency.
Story by: Mercy Addai Turkson #ahotorfmonline.com