The Ghana Revenue Authority (GRA) has announced sweeping reforms to the country’s Value Added Tax (VAT) regime following the passage of the Value Added Tax Act, 2025 (Act 1151), which takes effect from January 1, 2026.

In a notice to VAT-registered taxpayers and the general public, the GRA said the new law introduces significant changes aimed at simplifying VAT administration, reducing the tax burden on businesses and households, and improving compliance.

One of the key reforms is an increase in the VAT registration threshold for businesses dealing in goods, which has been raised from GHS 200,000 to GHS 750,000.

The Authority said this is expected to reduce the compliance burden on small businesses and bring relief to micro and small-scale enterprises.

The Act also abolishes the COVID-19 Health Recovery Levy, removing an additional cost that was introduced during the pandemic.

Under the new regime, the National Health Insurance Levy (NHIL) and the Ghana Education Trust Fund (GETFund) levy have been re-coupled, allowing businesses to claim input tax credits on these levies.

Both NHIL and GETFund levies will now be treated as deductible input taxes, a move the GRA says will enhance fairness and transparency in the VAT system.

In another major change, the VAT rate has been reduced to 20 per cent, a measure intended to ease the tax burden on households and businesses and support economic activity.

The VAT Flat Rate Scheme (VFRS) has also been abolished, paving the way for a unified VAT structure that the Authority says will be more transparent and easier to administer.

The GRA noted that the reforms are designed to simplify the VAT system, promote equity, improve administrative efficiency, and encourage voluntary tax compliance.

It urged VAT-registered taxpayers, employers, accountants, auditors, importers, exporters, clearing agents, and tax consultants to familiarise themselves with the new provisions ahead of the January 2026 implementation.

The Authority advised the public to seek further information from the nearest Taxpayer Service Centre, contact the GRA through its toll-free line, WhatsApp platforms, or official email channels.

The GRA reaffirmed its commitment to integrity, fairness and service, stressing that the reforms are part of broader efforts to strengthen domestic revenue mobilisation for national development under the theme “Our Taxes, Our Future.