The Ghana Revenue Authority (GRA) has announced that the new Value Added Tax (VAT) reforms will take effect from January 1, 2026, following the passage of the VAT Bill, 2025, and its approval by the President.
The reforms represent a major restructuring of Ghana’s tax system, aimed at simplifying VAT administration, consolidating existing tax laws, scrapping the COVID-19 Levy, and improving compliance through increased digitisation. The changes are also designed to promote fairness, support economic growth, and strengthen domestic revenue mobilisation.
According to the GRA, the reforms form part of recommendations from the International Monetary Fund (IMF) to reduce bureaucracy in tax collection and make the system more efficient.
Key aspects of the new VAT regime include the unification of the flat-rate system, a reduction in the effective VAT rate, the ability for businesses to deduct GETFund and National Health Insurance Levy (NHIL) payments as input tax, and improved revenue efficiency. The reforms will also rely heavily on digital tools such as the E-VAT system to ensure more accurate and transparent tax collection.
Speaking to journalists, the Commissioner for the Domestic Tax Revenue Division, Dr Martin Kolbil Yamborigya, explained that consumers will now pay a total VAT rate of 20 percent on goods and services, down from the previous effective rate of 21.9 percent.
The GRA says the new system is expected to ease the tax burden on consumers while improving compliance and efficiency across the economy.
“There will be a lot of benefits for the taxpayer 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.
The bill was passed in November this year after it was presented to parliament during the 2026 Budget statement and economic policy presentation.
The presidential assent gives more backing to the Ghana Revenue Authority to go ahead with the implementation of the reforms in the law.
