Dr. Martin Kolbil Yamborigya, the Ghana Revenue Authority’s (GRA) Commissioner for Domestic Tax Revenue, claims that recent amendments to the new Value Added Tax (VAT) law will result in a decreased effective VAT burden for taxpayers, contrary to public expectations of higher taxes.
Dr. Kolbil told Joy Business that the modified VAT system has separated the tax base, allowing the VAT, GETFund Levy, and National Health Insurance Levy (NHIL) to be computed using the same base value.
“This means that before you apply the 15% VAT rate, you had to add the 2. 5% GETFund and the 2. 5% National Health Insurance Levy. That resulted in a higher effective VAT rate,” he said. “But we have brought it back to where it was before. “
He utilized a basic example to highlight the difference, noting that if the taxable base is GH¢100, the 2. 5 percent GETFund tax, the 2. 5 percent NHIL, and the 15 percent VAT will all be computed on the same GH¢100 basis.
“So what it means is that the effective VAT rate will be lower than before. Taxpayers will often pay less than they did previously, according to Dr. Kolbil.
His explanation comes after the Ghana Revenue Authority issued a public announcement stating that the Value Added Tax Act, 2025 (Act 1151), will take effect on January 1, 2026. The GRA stated that the delayed implementation is to provide companies and taxpayers enough time to prepare for the changes.
According to the Authority, the new VAT law includes broad changes aimed at simplifying VAT administration, increasing efficiency, and promoting voluntary compliance throughout the economy.
One of the notable modifications is the rise of the VAT registration threshold for enterprises that deal in goods, from GHc200,000 to GHc750,000. This change is projected to ease the regulatory burden on small businesses, enabling the GRA to focus on larger taxpayers.
The GRA has advised VAT-registered organizations and the general public to take note of the changes and begin adapting their systems ahead of the January 2026 implementation, since the new law is likely to drastically modify how VAT is charged, recorded, and credited in Ghana.