- Lawmakers Approve Sweeping Reform to Simplify VAT System
Ghana Overhauls VAT Framework. Ghana’s Parliament has passed the Value Added Tax (VAT) Bill, 2025, introducing one of the most significant reforms to the country’s consumption-tax framework in over a decade.
The newly approved law is aimed at restructuring Ghana’s VAT regime to improve clarity, reduce administrative inconsistencies, and enhance legal certainty for taxpayers and businesses.
Unified VAT Structure to Replace Fragmented System
The bill eliminates the current flat-rate system and replaces it with a unified, standardised VAT structure.
Tax analysts have long argued that the old framework created confusion, especially for small traders who struggled with varying VAT applications across sectors.
Under the new law, the VAT registration threshold has been increased, meaning thousands of micro and small businesses will no longer be required to register, charge, or remit VAT.
Revenue authorities say this measure is expected to reduce compliance pressure on informal and low-turnover enterprises.
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Minority Flags Potential Burden on Businesses and Consumers
During the parliamentary debate, Minority Leader Alexander Afenyo-Markin expressed concern that the new VAT regime could introduce indirect tax increases for businesses already battling high operational costs.
He warned that adjustments in the structure could translate to higher liabilities for companies and ultimately increase the financial load on ordinary Ghanaians.
According to the Minority, businesses may face challenges adjusting their pricing models, especially those operating under thin profit margins.
Government Insists Reform Will Not Raise Tax Burden
Deputy Finance Minister Thomas Nyarko Ampem dismissed the fears raised by the Minority.
He insisted that the VAT reform is not designed to introduce new taxes or increase the tax burden on businesses.
Rather, he described the new law as a crucial step toward improving taxpayer compliance, reducing loopholes, and aligning Ghana’s VAT system with modern international standards.
Ampem maintained that a clearer tax structure will reduce disputes between taxpayers and the Ghana Revenue Authority (GRA), improve voluntary compliance, and strengthen tax predictability for investors.
Broader Tax Reform Agenda Underway
The VAT Bill forms part of Ghana’s broader tax reform strategy aimed at improving domestic revenue mobilisation.
Government officials have repeatedly emphasised that sustainable revenue collection is essential for stabilising the economy, reducing borrowing, and supporting key public services.
The GRA is expected to roll out nationwide sensitisation campaigns to help businesses and taxpayers understand the changes ahead of implementation.
