Ghana’s new Value Added Tax (VAT) reforms have officially taken effect from January 1, 2026, with government abolishing the COVID-19 Levy, reducing VAT rates, and introducing measures aimed at easing the tax burden on households and businesses.
According to the Minister for Finance, Cassiel Ato Forson, the reforms are expected to return nearly GH¢6 billion to businesses and households in 2026, providing significant tax relief and supporting economic growth.
In a post on X on January 1, the Finance Minister wrote, “Afehyiapa ooo.
New VAT reforms start today!
Altogether, these VAT reforms are expected to return nearly GH¢6 billion to businesses and households this year alone!”
His post attached an image which outlined key components of the reforms, noting that the COVID-19 Levy has been abolished, a move that will put GH¢3.7 billion back into the pockets of individuals and businesses in 2026 alone.
He further noted that the VAT rate has been reduced to 20 percent, a measure aimed at easing pressure on households and lowering costs for businesses across the economy.
The Ghana Education Trust Fund (GETFund) and National Health Insurance Levy (NHIL) are also now input output deductible, a reform the Finance Minister says will reduce the cost of doing business by about 5%.
The threshold for VAT registration for businesses dealing in goods has also been increased from GH¢200,000 to GH¢750,000 in annual turnover, a move intended to bring relief to small and medium-sized enterprises.
Additionally, the VAT Flat Rate Scheme has been abolished and replaced with what the Finance Minister described as a unified and more transparent VAT structure.
The Finance Ministry said the combined impact of the reforms will inject nearly GH¢6 billion back into the economy in 2026, supporting businesses, boosting household spending, and driving growth.
The measures were described as “tax relief in action,” as part of government’s broader agenda of resetting the economy for growth, job creation, and economic transformation.
The plan to abolish the COVID-19 Health Recovery Levy was first announced by the Finance Minister, Dr. Cassiel Ato Forson, during the presentation of the 2026 Budget Statement to Parliament on November 13, 2025.
