The final Value Added Tax (VAT) rate that will be paid by businesses is expected to be reduced from 22% to 20 % from 2026.

This will be captured in the 2026 Budget, which the Finance Minister Dr. Ato Forson has disclosed to JOYBUSINESS that it could be presented to parliament in October 2025.

Businesses currently pay about 22 percent as the effective VAT, however due to the current on-going reforms and moves to simplify this tax type and regulations, that final rate will be reduced to 20 percent.

Commissioner General of the Ghana Revenue Authority, Anthony Sarpong who disclosed this on PM EXPRESS Business Edition with George Wiafe on 21^st August 2025, noted that government is committed to reducing the tax burden on businesses.

The Commissioner General noted that they are also working to de-couple the levies that increases the final tax paid by businesses registered for VAT.

“The new VAT bill should be ready by September this year and that should help the Finance Minister lay it before the end of 2025,” the commissioner revealed.

Ghana’s VAT structure

According to the Ghana Revenue Authority, the Value Added Tax is applied on the value added to goods and services at each stage in production and the distribution chain. It forms part of the final price that the consumer pays for the goods and services.

Following the passage of the Value Added Tax (Amendment) by parliament the VAT rate was increased from 12.5% to 15 percent as the standard VAT rate. However, the addition of National Health Levy (NHIL), Ghana Education Trust Fund Levy (GETFund Levy) and the COVID -19 Health Recovery Levy (COVID-19 HL) are separate levies that are calculated on the taxable value.

These charges have implications on the calculation of the Tax for VAT registered persons.

Breakdown

• VAT standard Rate – 15%
  
• National Health Insurance Levy (NHIL) - 2.5%
  
• Ghana Education Trust Fund (GETFUND) - 2.5%
  
• COVID-19 Health Recovery Levy (COVID-19 HRL) - 1%

Ongoing VAT Reforms

The Commissioner General of the Ghana Revenue Authority also maintained that, GRA has made significant progress on reforms that is seeking to simplify the current VAT laws as well as the whole tax structure in the country.

“We are currently at the last phase of engagement, and everything should be finalised by September this year,” the Commissioner General said.

The Commissioner General added “we have also come very far in removing the COVID-19 Levy as well”  

Anthony Sarpong noted that, the finance minister is expected to present the revised VAT regulations bill and the removal of the COVID-19 Levy to parliament this year, however its implementation will take off from 2026.

The Commissioner General of the Ghana Revenue Authority however rejected arguments, the expected 20 percent effective VAT rate is too high, adding that “we are working very hard to improve compliance and that could see government reduce the rate further going forward.

He also announced that they have made significant progress in helping businesses to understand the current tax laws, “a move that could go a long way to improve compliance”