GRA VAT Reforms Cut Prices, Improve Compliance
The Ghana Revenue Authority (GRA) has announced comprehensive reforms to the Value Added Tax (VAT) regime, aimed at lowering prices, improving compliance, and supporting the government’s GH¢225 billion revenue target for 2026.
According to Mr Thomas T. K. Agorsor, Head of the Domestic Tax Revenue Division (DTRD) Free Zones Office, and Mr David Lartey Quarcoopome, Chief Revenue Officer and DTRD Projects Coordinator of the GRA, the new VAT Act 1151 of 2025 harmonises VAT, the GETFund levy, and the National Health Insurance Levy into a single standard rate of 20 per cent.
The officials explained that the previous decoupling of levies had increased business costs, discouraged compliance, and contributed to a VAT compliance gap of about 60 per cent. The abolition of the COVID-19 levy, recoupling of levies, and higher VAT registration threshold are expected to ease the cost of doing business and stabilise prices for consumers.
Small businesses below the new threshold will be transitioned to the Modified Tax Scheme, while medium and large businesses will benefit from input tax credits and simplified compliance. Enhanced taxpayer education, digital payment platforms, electronic invoicing, and targeted market outreach will support voluntary compliance.
“With certainty in the system and fairness in implementation, compliance is expected to rise, the tax gap narrows, and revenue targets will be met,” the officials said. This development is expected to have a positive impact on the Ghanaian economy, as it aims to reduce the cost of doing business and increase revenue collection.
Image Source: MYJOYONLINE
