VAT reforms: Implementation key to this fresh breath

One of the high points of the 2026 Budget is the Value Added Tax (VAT) reforms announced by the Minister of Finance, Dr Cassiel Ato Forson. 

The measures positioned the 2026 Budget as a forward-looking blueprint designed to boost trade, enhance revenue mobilisation and drive long-term economic growth.

The changes are aimed at simplifying the tax system, reducing burdens on businesses and promoting economic growth.

Captains of industry and economists believe the measures are a breath of fresh air after years of a heavy tax burden.

For instance, the scrapping of the COVID-19 Health Recovery Levy, reversing the decoupling of the Ghana Education Trust Fund (GETFund) levy and the National Health Insurance Levy (NHIL) is projected to return GH¢3.7 billion directly to the public and boost the economy by a further GH¢6 billion.

Raising the VAT registration threshold to GH¢750,000 from GH¢200,000 is a win for small businesses, giving them room to grow.

Some sectors also received a boost. The removal of VAT on mineral exploration is anticipated to revitalise new mining investments, while the zero-rating of VAT on local textiles until 2028 provides essential support to a struggling industry.

Under the zero-rate scheme, textile manufacturers will neither charge VAT nor collect it on behalf of the government, yet they can still reclaim any VAT paid on their production inputs.

This effectively eliminates VAT as a cost to local textile producers.

The Daily Graphic welcomes these reforms and urges the government to ensure their effective implementation.

The scrapping of the COVID-19 Health Recovery Levy is a welcome move, returning GH¢3.7 billion to individuals and businesses.

Similarly, reversing the decoupling of the GETFund and NHIL levies from the VAT base will reduce business costs by about five per cent. 

These measures, together with other reforms, will return about GH¢6 billion to households and businesses, providing much-needed relief in an economy still recovering from the impact of the pandemic.

Raising the VAT registration threshold to GH¢750,000 will significantly boost small businesses and enterprises.

This adjustment acknowledges that the previous threshold had become too low, pulling in even small corner shops and agro-processors, and stifling their growth.

By easing this burden, the government is giving small businesses the space they need to expand and contribute meaningfully to the economy.

The reforms also address sectors that have remained stagnant for far too long.

Abolishing VAT on mineral exploration and reconnaissance could revive investor interest in Ghana's mining sector, which has seen little new activity in nearly two decades.

This measure has the potential to attract responsible exploration, curb harmful illegal practices, and strengthen the long-term viability of the sector.

However, while the proposals are ambitious, their success will depend heavily on effective implementation.

The government’s plan to introduce digital tax collection tools, fiscal electronic devices and a VAT reward scheme is innovative, but innovation without proper public education risks creating confusion and mistrust.

We, therefore, urge the Ghana Revenue Authority (GRA) to deliver on its promise of a comprehensive national sensitisation campaign—one that reaches everyone, from the seamstress issuing her first electronic receipt to the online retailer navigating cross-border tax rules.

Transparency will also be crucial in ensuring the success of these reforms.

Ghanaians have become more engaging and more sceptical than ever.

They will want to see that the promised savings truly reflect on prices, business operations and household budgets. 

The government must ensure that the benefits of these reforms are felt by all, particularly the most vulnerable members of society.

In many ways, the VAT reforms represent more than fiscal adjustments; they signal an effort to rebuild confidence in the tax system and in the social contract between citizens and the state.

If executed well, they could help shape a fairer, simpler and more predictable economic environment.

But as always, the real test begins after the applause fades.

We encourage the government to remain committed to these reforms and ensure their effective implementation.

We will continue to monitor the situation and hold the government accountable for its promises.