Parliament has passed the Value Added Tax Bill, 2025, introducing Ghana’s biggest VAT overhaul in more than a decade and officially scrapping the COVID-19 Health Recovery Levy.
Finance Minister Dr. Cassiel Ato Forson said the reforms fulfil a key government pledge to simplify the VAT system, cut compliance costs, and make taxation more growth-oriented.
“We promised to abolish the COVID-19 levy… today, it is abolished,” he announced.
With the levy gone, individuals and businesses are expected to save GH¢3.7 billion in 2026 alone. Government estimates that the full package of reforms will return nearly GH¢6 billion to the economy.
Key changes in the new VAT regime include:
• Removal of VAT on mineral reconnaissance and prospecting to revive exploration investment.
• Reduction of the effective VAT rate from 21.9% to 20%.
• Increase in VAT registration threshold from GH¢200,000 to GH¢750,000, freeing many micro-businesses from mandatory registration.
• Zero-rated VAT on local textiles extended to 2028, safeguarding jobs and boosting competitiveness.
• Reinstatement of input tax deductions for GETFund and NHIL to ease the cost of doing business.
Dr. Forson said the reform goes beyond tax cuts, noting upcoming measures such as Fiscal Electronic Devices, digital VAT collection on cross-border e-commerce, and consumer reward incentives to improve compliance.
The Ghana Revenue Authority will roll out nationwide sensitisation before implementation.
