VIDEO: How to calculate VAT as a business under the new January 1 reforms - GRA explains

The Ghana Revenue Authority (GRA) has detailed a series of major Value-Added Tax (VAT) reforms effective from January 1, 2026, fundamentally altering how businesses calculate and administer the tax. 

The changes, announced in a public information drive, encompass new rates, revised registration thresholds, and expanded digital compliance measures.

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A cornerstone of the reform is the repeal of the temporary COVID-19 Levy. "The 1% COVID -19 Levy has been removed from VAT computation," the GRA stated, a move that directly reduces the tax burden on transactions.

Simultaneously, the registration threshold for VAT has been significantly raised. Businesses will now only be required to register for VAT if their annual taxable turnover exceeds GHS750,000, a substantial increase from the previous GHS200,000 mark. This "Higher Registration Threshold" is expected to relieve many small businesses from the administrative burden of VAT compliance.

For businesses that remain within the VAT net, the calculation method has been unified and clarified. The GRA has abolished the 3% VAT Flat Rate Scheme. It is "now replaced with a unified VAT system." Under this system, the standard rate is broken down into distinct components which must be "clearly displayed on receipts for transparency." These are: "VAT: 15% | NHIL: 2.5%" and "GETFund Levy: 2.5%", leading to a "Total: 20%".

Crucially, the GRA explains that this does not represent a rate increase but a restructuring. The authority projects that "Prices of VAT-able goods and services will drop by 1.92% in 2026" as a result of the changes.

A significant boost for VAT-registered businesses is the expansion of input tax deductions. "VAT-registered businesses can now claim input tax on NHIL and GETFund Levy, improving cash flow," the GRA highlighted. This means businesses can recover the full 20 per cent charge on their purchases, reducing their net VAT liability and potentially lowering costs.

The reforms also introduce sector-specific benefits. "Reconnaissance and prospecting activities in mining no longer attract VAT," offering support to the mining sector. Furthermore, the zero-rated VAT status for "locally produced textiles [is] extended until 2028."

To strengthen administration, the GRA is rolling out "Fiscal Electronic Devices (FEDs) to support VAT-registered businesses and strengthen compliance." This is part of broader "Digital VAT Solutions to improve VAT administration and capture tax on cross-border digital transactions."

Complementing this, a "VAT Reward Scheme" will be introduced. "Incentives will be introduced to encourage the public to collect VAT receipts and businesses to issue VAT invoices," the authority announced.

Watch the video below;