GRA rolls out VAT overhaul, lifting burden on small businesses

Ghana’s tax authorities are repositioning the VAT system to give businesses more breathing space and simplify compliance, as sweeping reforms under the new VAT law take effect.

In a notice to taxpayers, the Ghana Revenue Authority said the changes are aimed at reducing pressure on small businesses while making VAT administration clearer and more efficient. A key shift is the sharp increase in the VAT registration threshold for traders in goods, which moves from GH¢200,000 to GH¢750,000. This adjustment is expected to remove many small and micro enterprises from the VAT net, allowing them to focus on growth rather than complex tax obligations.

The reforms also mark the end of the COVID-19 Health Recovery Levy, a charge introduced at the height of the pandemic. Its removal signals a return to a more streamlined tax structure as the economy stabilises. At the same time, the National Health Insurance Levy and the GETFund levy have been re-aligned with VAT, enabling businesses to claim input tax credits on these components for the first time.

Another notable change is the reduction of the effective VAT rate to 20 per cent, alongside the abolition of the VAT Flat Rate Scheme. According to the Authority, these measures are designed to create a single, transparent VAT framework that is easier to administer and fairer to taxpayers.

The GRA says the overall goal is to encourage voluntary compliance, improve efficiency, and ease the tax burden on households and businesses. It has advised taxpayers and professionals across the value chain to familiarise themselves with the new rules and seek clarification through official GRA support channels ahead of full implementation.