The implementation of the value-added tax reforms is set to commence from 1st January 2026 by the Ghana Revenue Authority (GRA).

New VAT, Commissioner for Domestic Tax Revenue Division, Dr. Martin Kolbil Yamborigya explained that hat customers will now be required to pay 20 % instead of 21.9% on their goods and services.

“There will be a lot benefits for the tax payer because we have now re-coupled the National Health Insurance Levy and Ghana Education Trust Fund (GETFUND), so it will bring down the amount to be paid. This will mean that some savings will be made by businesses and also the fact that it has become an input tax to be claimed at the end of the day” he said.

Following the passage and presidential assent of the VAT Bill 2025 in November fter it was presented to parliament during the 2026 Budget statement and economic policy presentation, the new law is set to simplify Ghana’s tax framework, consolidate existing regulations, abolish the COVID-19 Levy, and enhance compliance through digitalisation.

The reforms aim to promote fairness and stimulate economic growth while strengthening domestic tax mobilisation. They also reflect recommendations from the International Monetary Fund to reduce bureaucratic hurdles in revenue collection.

Among the key changes are the unification of the flat-rate system, lower effective tax rates, the ability to deduct GETFund and NHIL contributions as input tax, and measures to improve overall revenue efficiency.

The law will also leverage digital platforms, including the E-VAT system, to ensure more accurate and transparent tax collection.

Presenting the 2026 Budget Statement and Economic Policy to Parliament on Thursday, November 11, Finance Minister Cassiel Ato Forson hinted that the government had completed the design of a modernised Ghana Value Added Tax (VAT) system fit for the country’s economic transformation agenda.

He mentioned, “As the new VAT reforms will do the following, we will abolish the COVID-19 Health Recovery Levy, Mr Speaker; we will abolish the decoupling of GetFund and National Insurance Levies from the VAT tax base. The current VAT rate will be reduced from 21.9% to 20%.

“In the 2025 budget, in the mid-year fiscal policy review, government made a firm promise to reform Ghana’s Value Added Tax (VAT) system to make it fairer, simpler, and more efficient. We pledged to remove distortions, address the cascading effects inherited in the VAT system, strengthen compliance, and create a tax regime that supports both businesses and fiscal stability. These distortions have negatively impacted overall welfare, increasing the deadweight loss in the economy and reducing VAT compliance.

“Today, Mr Speaker, I am proud to report to this House that we have finally delivered on that promise. After months of detailed analysis and broad consultations with stakeholders, we have completed the design of a modernised VAT system fit for Ghana’s economic transformation agenda. Government is therefore submitting to this House today, for approval, a bold package of VAT reforms that will make our tax system more equitable, transparent, and business-friendly.

“The new VAT reforms will do the following: we will abolish the COVID-19 Health Recovery Levy. We will abolish the decoupling of GetFund and National Insurance Levies from the VAT tax base. We will abolish VAT on the recognition of minerals. We will reduce the effective VAT rate from 21.9% to 20%. We will raise the VAT registration threshold from GH₵200,000 to GH₵750,000.

“We will extend VAT zero rating on the supply of local manufacturing textiles to 2028. Mr Speaker, for emphasis, we promised to abolish the COVID Levy, and with the support of this House, I am proud to say that today, the COVID Levy is accordingly abolished. By abolishing the COVID-19 Levy, the government is putting GH₵3.7 billion in the pockets of individuals and businesses in 2026 alone”.

Earlier this year, President John Dramani Mahama’s administration repealed the betting tax, emissions tax, and other levies. The Electronic Transaction Levy (E-Levy), introduced in 2022, imposed a 1.5% tax on electronic transactions. Although it was later reduced to 1%, the levy remained unpopular, drawing criticism from businesses, consumers, and political stakeholders who argued that it stifled digital transactions and disproportionately affected low-income earners. Many contended that it placed an unnecessary burden on citizens.

The removal of this tax was a core pledge in the NDC’s manifesto, aimed at reducing the cost of living and encouraging business expansion. With the repeal bill now signed into law, many Ghanaians can breathe a sigh of relief.

Supporters of the repeal argue that eliminating these levies will promote digital transactions, stimulate economic activity, and improve disposable income for households and businesses. Meanwhile, the government has officially scrapped the COVID-19 Health Recovery Levy introduced during the pandemic era.

Introduced on 31 March 2021 under Act 1068 during the tenure of former President Nana Addo Dankwa Akufo-Addo, the levy applied a 1% charge on the supply of goods and services in Ghana, excluding certain items. and on imports of goods and services. According to the New Patriotic Party (NPP), the levy was intended to help the government raise funds to fight the pandemic and support recovery efforts.

However, presenting the 2026 Budget Statement and Economic Policy to Parliament on Thursday, November 11, Finance Minister Cassiel Ato Forson disclosed that the government has abolished the levy with immediate effect.

According to him, the move will save individuals and businesses GH₵3.7 billion in taxes, money that can instead be invested back into their businesses or personal ventures.