The Ghana Revenue Authority (GRA) has announced that the implementation of far-reaching reforms to the Value Added Tax (VAT) system will officially begin on Thursday, January 1, 2026, following the passage of the Value Added Tax Act, 2025 (Act 1151).
In a notice issued to VAT-registered taxpayers and the general public, the Authority said the new law introduces significant changes aimed at simplifying VAT administration, reducing the tax burden on businesses and households, and improving voluntary tax compliance.
A major highlight of the reforms is the increase in the VAT registration threshold for businesses dealing in goods from GH¢200,000 to GH¢750,000. The GRA said the adjustment is intended to ease compliance requirements for small and medium-sized enterprises while allowing the Authority to focus on higher-risk and higher-value taxpayers.
The reforms also include the abolition of the COVID-19 Health Recovery Levy, which was introduced during the height of the pandemic. In addition, the National Health Insurance Levy (NHIL) and the Ghana Education Trust Fund (GETFund) levies have been re-coupled, enabling taxpayers to claim input tax credits. Under the new regime, both levies will be treated as input tax deductions.
The GRA further announced a reduction in the VAT rate to 20 percent, a measure designed to ease the overall tax burden and support economic activity across households and businesses.
As part of efforts to improve transparency and efficiency, the VAT Flat Rate Scheme (VFRS) has been abolished and replaced with a unified VAT structure, which the Authority believes will enhance fairness and consistency in VAT administration.
According to the GRA, the reforms are intended to simplify the VAT system, promote equity, improve administrative efficiency, and encourage voluntary compliance.
The Authority however urge VAT-registered taxpayers, employers, accountants, auditors, importers, exporters, clearing agents and tax consultants to take note of the changes and prepare adequately ahead of the implementation date.
