The Ghana Revenue Authority (GRA) has confirmed that the Value Added Tax Act, 2025 (Act 1151) will take effect from January 1, 2026, allowing businesses and taxpayers time to prepare for major reforms to Ghana’s VAT system.
In a public notice to VAT-registered taxpayers and the general public, the Authority said the new law introduces wide-ranging changes aimed at simplifying VAT administration, improving efficiency, and promoting voluntary tax compliance.
The reforms are expected to significantly reshape how VAT is charged, reported, and credited across the economy.
A key change under the new Act is the increase in the VAT registration threshold for businesses dealing in goods, which has been raised from GH¢200,000 to GH¢750,000. The GRA says the adjustment will ease the compliance burden on small businesses by exempting more micro and small enterprises from mandatory VAT registration.
The Authority also announced the abolition of the COVID-19 Health Recovery Levy, removing an additional consumption tax introduced during the pandemic.
Under the new framework, the National Health Insurance Levy (NHIL) and the Ghana Education Trust Fund (GETFund) levies have been re-coupled, allowing businesses to claim input tax credits, a change expected to enhance fairness in the tax system.
In addition, the standard VAT rate has been reduced to 20%, a move the GRA says will help ease the tax burden on households and businesses.
The VAT Flat Rate Scheme has also been abolished, paving the way for a more unified and transparent VAT structure nationwide.
According to the GRA, the reforms are designed to promote equity, strengthen compliance, and enhance administrative efficiency within the tax system.
The Authority has urged employers, accountants, auditors, importers, exporters, clearing agents, and tax consultants to familiarise themselves with the new provisions ahead of the January 2026 rollout.
Taxpayers seeking clarification have been encouraged to engage the GRA through its Taxpayer Service Centres, toll-free lines, and digital support platforms as preparations begin for the full implementation of the new VAT Act.
Source: citinews
