New Value Added Tax (VAT) reforms have officially taken effect from January 1, 2026, with the government outlining measures aimed at easing the tax burden on households and businesses.
According to the Ministry of Finance, the COVID-19 Levy has been abolished, a move expected to return about GH¢3.7 billion to individuals and businesses in 2026 alone.
The VAT rate has also been reduced to 20 percent to provide relief for consumers and enterprises. In addition, the GETFund and National Health Insurance Levy (NHIL) have been made input-output deductible, a change the government says will cut the cost of doing business by an estimated five percent.
Under the new reforms, businesses dealing in goods will now be required to register for VAT only if their annual turnover exceeds GH¢750,000, up from the previous threshold of GH¢200,000.
The VAT Flat Rate Scheme has also been abolished and replaced with a unified and more transparent VAT structure.
Overall, the government says the VAT reforms are expected to return nearly GH¢6 billion to businesses and households in 2026, describing the measures as part of broader efforts to reset the economy for growth, job creation and economic transformation.
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