Details of the VAT Rate Reform
- VAT reduction to 20%: The headline measure is a cut in the effective VAT rate, dropping from 21.9% to 20%. This is achieved by abolishing the 1% COVID-19 Health Recovery Levy and restoring input tax deductibility for the NHIL and GETFund levies.
- Threshold increase: The VAT registration threshold is raised from GH¢200,000 to GH¢750,000, exempting thousands of micro and small businesses from VAT obligations.
- Input credit expansion: Businesses can now claim input credits on NHIL and GETFund levies, reducing cascading effects and lowering production costs.
- Sectoral relief: Zero-rating continues for locally manufactured textiles until 2028, and VAT on mineral exploration is repealed, supporting targeted industries.
- Compliance modernization: E-invoicing and digital reporting tools will be expanded to strengthen VAT enforcement and reduce evasion.
- Implementation is likely from 1 January 2026.
Sources:
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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