GRA announces overhaul: VAT rate cut, flat rate scheme scrapped, COVID levy abolished from Jan 1

The Ghana Revenue Authority (GRA) has unveiled a comprehensive reform of the national Value Added Tax (VAT) system, announcing a reduction in the standard rate and the abolition of several ancillary levies, set to take effect from the start of the new year.

In an official notice to all VAT-registered taxpayers, the GRA outlined the key changes following the passage of the Value Added Tax Act, 2025 (Act 1151). Among the most impactful measures is a direct cut to the core VAT rate. 

"The VAT rate has been reduced to 20 percent to ease the tax burden on households and businesses," the authority stated.

In a major shift for small and medium-sized enterprises, the registration threshold for businesses dealing in goods has been substantially raised. 

"The threshold for VAT registration for businesses who deal in goods has been increased from GH¢200,000 to GH¢750,000," the notice confirmed, a move expected to deregulate thousands of smaller traders.

The reforms also dismantle specific charges introduced in recent years. The notice declared that "the COVID-19 Health Recovery Levy has been abolished." Furthermore, the GRA announced "the re-coupling of NHIL and GETFund levies, to allow for input tax credit claims," specifying that "GETFund and NHIL levies will be treated as input tax deductions."

Another significant structural change is the discontinuation of a separate scheme for retailers. "The VAT Flat Rate Scheme (VFRS) has been abolished with the introduction of a unified and more transparent VAT structure," the GRA explained.

The collective changes are slated for a swift implementation, with the GRA noting the "effective implementation of the VAT Act is January 1, 2026."

The authority directed its notice to "the general public, particularly VAT Registered Taxpayers, Employers, Accountants, Auditors, Importers, Exporters, Clearing Agents and Tax Consultants," stating that the reforms are "designed to simplify the VAT system, promote equity, improve administrative efficiency, and encourage voluntary tax compliance."

For further clarification, the GRA has advised the public to contact their nearest Taxpayer Service Centre or use the provided toll-free lines, WhatsApp numbers, and email address. The notice was issued under the authority of the Commissioner-General.