Dr Martin Kolbil Yamborigya, the Commissioner for the Domestic Tax Revenue Division at the Ghana Revenue Authority (GRA), says recent changes under the new Value Added Tax (VAT) law will result in a lower effective VAT burden for taxpayers, contrary to public concerns about higher taxes.

Speaking to Joy Business, Dr Kolbil said the revised VAT structure has decoupled the tax base, ensuring that VAT, the GETFund Levy and the National Health Insurance Levy (NHIL) are all calculated on the same base amount.

“What it means is that before you apply the VAT rate of 15 per cent, you had to include the GETFund of 2.5 per cent and the National Health Insurance Levy of 2.5 per cent. That gave a higher effective VAT rate,” he explained. “But we have brought it back to where it was before.”

He illustrated the change using a simple example, noting that if the taxable base is GH¢100, the GETFund levy of 2.5 per cent, the NHIL of 2.5 per cent and the 15 per cent VAT will all now be calculated on that same GH¢100 base.

“So what it implies is that the effective VAT rate will be lower than what it used to be. Taxpayers ordinarily will be paying less than what they previously paid,” Dr. Kolbil said.

His explanation comes on the back of a public notice issued by the Ghana Revenue Authority confirming that the Value Added Tax Act, 2025 (Act 1151), will take effect from January 1, 2026. The delayed implementation, the GRA said, is to give businesses and taxpayers adequate time to prepare for the changes.

According to the Authority, the new VAT law introduces wide-ranging reforms aimed at simplifying VAT administration, improving efficiency and encouraging voluntary compliance across the economy.

One of the notable changes is the upward revision of the VAT registration threshold for businesses dealing in goods, which has increased from GH¢200,000 to GH¢750,000. This move is expected to reduce the compliance burden on small businesses while allowing the GRA to focus on larger taxpayers.

The GRA has urged VAT-registered businesses and the general public to take note of the reforms and begin adjusting their systems ahead of the January 2026 implementation, as the new law is expected to significantly reshape how VAT is charged, reported and credited in Ghana.