VAT

Value Added Tax – VAT

Value Added Tax (VAT) is a consumption expenditure tax applied on the value added to goods and services at each stage in the production and distribution chain. It forms part of the final price a consumer pays for goods or services. In some countries, it is called Goods and Services Tax (GST). Click file and pay

VAT Reforms – 2026

In the 2025, the government through the Ministry of Finance and Ghana Revenue Authority (GRA) undertook comprehensive VAT reforms as part of broader measures to enhance domestic revenue mobilization, improve efficiency in tax administration and alleviate tax burden on households and businesses. These reforms passed under the Value Added Tax Act, 2025 (Act 1151) took effect from 1st January 2026.

Key Highlights from VAT Reforms

Removal of the COVID 19 Health Recovery Levy

The 1% levy has been abolished, reducing the overall cost to customers on VAT‑able goods and services.

Simplified VAT Computation

VAT is now calculated as 15% of the total price of an item, in addition to the 2.5% NHIL, and 2.5% GETFund Levy, also calculated on the total price. This implies that the VAT, the NHIL and the GETFund Levy are all charged on the same base or value.

Abolition of the Cascading Effect (decoupling VAT and levies)

The levies has been re-coupled with the VAT. Thus, the old system of adding levies (COVID‑19, NHIL, GETFund — totalling 6%) to costs before applying 15% VAT has been scrapped, thereby reducing the cost of doing business in Ghana.

Revision of Registration Threshold

The threshold for businesses that deal in goods has been raised from GHS 200,000 to GHS 750,000, in doing so Government is excluding micro and small enterprises from VAT obligations.

Elimination of the VAT Flat Rate Scheme

The 3% flat rate scheme on supply of goods and 5% flat rate scheme for supply of immovable properties have been removed in favour of a unified and transparent VAT structure.

Input deductibility of NHIL and GETFund Levy

Re-coupling of NHIL and GETFund Levy make the two levies now part of the VAT base again, restoring the ability to claim input tax credits on the two levies.

Zero Rated VAT for Local Textiles

To promote the domestic industry, the supply of locally manufactured sanitary towels is subject to a tax rate of 0%. Similarly, the supply of locally manufactured textiles will also be subject to a VAT rate of 0% until the 31^stDecember 2028.

Exempt for Exploration in Mining

Supply of goods and services in connection with reconnaissance and prospecting activities in mining are reliefed from VAT. This however required the holder of mining licence to provide satisfactory documentation and also register with GRA.

Introduction of Digital Solutions

GRA has new digital solutions to improve VAT administration and capture tax on cross-border digital transactions. The digital solution would help monitor the digital economy and detect non-complying non-resident persons operating in Ghana’s digital space.

Introduction of FEDS

Fiscal Electronic Devices will be rolled out to support VAT-registered businesses and strengthen compliance.

Rates For VAT Computation (After Reforms)

Value Added Tax (VAT) Rate = 15%
National Health Insurance Levy (NHIL) = 2.5%
Ghana Education Trust Fund Levy (GETFund) = 2.5%

Refunds

These rates are all chargeable on the value of:

Every supply of Goods and services in Ghana.
Importation of goods.
Supply of digital service by non-resident person
import of services, unless otherwise exempted in the VAT Act 2025 (Act 1151) or Regulations made under it.

Sample Illustration of VAT Computation & Interpretation

VAT computation after reforms (NOW)

Selling price = 1,000

NHIL = 2.5% of 1,000 = GHS 25

GETFund Levy = 2.5% of 1,000 = GHS 25

VAT = 15% of 1,000 = GHS 150

Selling price (1000) + levies (50) + VAT (150) = GHS 1,200

II. VAT computation before reforms

Stage 1: Selling price + levies

Selling price = GHS 1,000
NHIL = 2.5%×1,000=25
GETFund Levy = 2.5%×1,000=25
COVID‑19 Levy = 1%×1,000=10
Total levies = 25 + 25 + 10 = 60
VAT‑able value = 1,000+60 =1,060

Stage 2: VAT at 15%

VAT = 1,060×0.15 = 159

Stage 3: Add VAT to VAT‑able value

Total = 1,060+159 = 1,219

The final VAT‑inclusive amount before VAT reforms was GHS 1,219.

Therefore, the difference between the old (GHS1,219) and new (GHS1200) calculations is GHS19 indicating a reduction in price.

VAT Calculator

This calculator helps you compute VAT on any amount; be it inclusive or exclusive. Click to try it.

The Base for Charging VAT and Levies

The value of the supply (goods and/or services) should be stated excluding values of levies and VAT.
All non deductible levies and taxes must be included in the cost build up (i.e., treated as part of the cost) when determining the base for computing NHIL and GETFund. These levies and taxes, although non deductible for VAT purposes, may still be treated as deductible expenses in the financial statements and when filing income tax returns.

Key Features on the NHIL and GETFund Levy

VAT Registered Taxpayers can now claim the NHIL and the GETFund charged on their purchases as input tax (i.e., the levies are now subject to input tax deduction).
The levies are to be charged at every stage that a VAT-able supply is made by VAT-registered taxpayer.
VAT-Registered persons are now to account for NHIL and GETFund on import of services (which include management and technical services, patents, licenses, etc.) on monthly imported service(s) return.
Items that attract a zero (0%) rate of VAT also attract a zero rate of GETFund and the NHIL.
Supplies relieved from VAT are also relieved from NHIL and GETFund Levy.
Supplies exempted from VAT are also exempted from NHIL and GetFund Levy.

Invoices / E-VAT (Computer Generated Invoices)

A modified VAT invoice isolating the levies from VAT will be issued to taxpayers.

Own computer-generated invoices and sales receipts – taxpayers authorized to use their own computer-generated invoices and sales receipts must modify them to provide separate lines for NHIL at 2.5%, GETFund levy at 2.5%, and a line for the VAT at 15%.

Authorized computer-generated invoice and sales receipt must be modified to provide specifically for the following in addition to the VAT of 15%:

a separate line for NHIL at a rate of 2.5%
a separate line for GETFUND Levy at a rate of 2.5%

Inclusive Amounts

Where the amount is inclusive of NHIL, GETFund Levy & VAT, you must indicate the amount in the field labelled total tax inclusive value.

Responsibilities of VAT-registered Suppliers

Register with the nearest Taxpayer Service center if your business income meets the threshold for VAT registration
Existing flat rate taxpayers who do not meet the registration threshold should remain registered until de-registered by the Commissioner-General. You may report to your tax office for audit and determination of registration status.
Account for the full output tax at 15% and NHIL 2.5% and GETFund 2.5% on the monthly VAT and levies return.
Retain withholding VAT credit certificate issued to them by withholding VAT agents as proof for audit purposes.
Discharge all other duties and obligations applicable to them under the VAT law.

Responsibilities of the Public

Insist on your VAT invoice i.e. Traditional VAT invoice or E-VAT invoices
Scan QR Code on electronic invoices to verify if it is a correct VAT invoice or receipt

Return Filing and Payments

Taxpayers are to file their returns and make payments by the last working day of each month immediately following the month to which the returns relate. For example, October returns must be submitted by the last working day in November. If payment is due on the returns submitted, it must be made not later than the date the return is submitted.

The return must be on the form prescribed by the Commissioner General. Copies of the tax returns form can be downloaded from gra.gov.gh/forms.

The following returns will be submitted by the VAT-registered taxpayer

VAT and levies returns for supplies

VAT, NHIL & GETFund Levy Invoice

The Commissioner-General’s invoice should contain fields for NHIL, GETFund levy, and VAT.
In completing the invoice, the field for total of NHIL, GETFund Levy and VAT is mandatory. It is obligatory however for every taxpayer to enter on the invoice, the total of NHIL, GETFund Levy and VAT without which the vouching of invoices during audit visits would be made extremely tedious.
Points (1&2) above relating to NHIL, GETFund Levy and VAT invoice equally apply to the Hotel and Restaurant Receipt/Invoice and sales receipt

VAT