Ghana’s Parliament has approved a new Value Added Tax (VAT) Bill, marking the country’s most significant tax system overhaul in over ten years. A key part of this reform is the official cancellation of the COVID-19 Health Recovery Levy.
The changes deliver on a major government promise made in the 2025 budget to create a fairer and simpler VAT system. Finance Minister Dr. Cassiel Ato Forson stated that the new law will remove complexities, encourage businesses to comply, and improve economic efficiency.
Key Benefits of the New VAT Law
The new structure introduces several important benefits for individuals and businesses:
- Abolished COVID Levy: The removal of the COVID-19 levy is expected to return GH¢3.7 billion to the economy in 2026 alone.
- Reduced Business Costs: The bill reintegrates GETFund and NHIL levies into the VAT base, making them eligible for tax deductions. This move is projected to lower the cost of doing business by about 5%.
- Support for Small Businesses: The VAT registration threshold has been raised. This change prevents small, micro-enterprises from being burdened by complex VAT registration and compliance costs, allowing them more freedom to grow.
A Move to a Digital Tax System
The reform also modernizes tax collection. The government will introduce electronic devices to track transactions and implement digital VAT collection for cross-border online shopping. A new VAT reward scheme will also encourage consumers to always request receipts, helping to improve overall tax compliance.
The Ghana Revenue Authority will soon begin a nationwide education campaign to ensure a smooth transition for all businesses and consumers. The government believes these comprehensive reforms will boost investor confidence, support local industries, and stimulate job creation.
