Accra: The Government of Ghana has announced plans to implement a comprehensive Value Added Tax (VAT) and broader tax reforms this year, aimed at addressing distortions, enhancing compliance, and boosting revenue generation. This was announced by Dr. Cassiel Ato Forson, Minister for Finance, during the presentation of the 2025 Mid-Year Fiscal Policy Review to Parliament on July 24, 2025.
According to Ghana News Agency, the reforms seek to overhaul the current VAT structure, which has been identified as having cascading effects and distortions. To this end, the government has successfully concluded its engagement with the International Monetary Fund (IMF) for technical assistance.
The Minister of Finance noted that currently, the Ghana Revenue Authority (GRA), in collaboration with the Ministry of Finance, is conducting a nationwide consultation process. This initiative is designed to sensitize key players in the trade and business sectors about the impending VAT reforms and to gather their feedback. The Ministry of Finance anticipates completing this crucial consultation by September 2025.
Following the consultations, a new VAT bill is expected to be prepared by October 2025 and subsequently submitted to Parliament as part of the 2026 Budget Statement. Key components of the proposed VAT reforms include the abolition of the COVID-19 Levy, reduction of the effective VAT rate, removal of the punitive cascading effect associated with the GETFund and NHIS levies, and elimination of VAT flat rates in favor of a unified VAT rate.
Other tax measures disclosed by the Finance Minister included an increase in the VAT registration threshold to provide exemptions for small and micro businesses, and enhanced compliance through public education, awareness creation, and the introduction of fiscal electronic devices.
In a related tax reform, the government will withdraw tax exemptions on marine gas oil (MGO). This measure aims at curbing smuggling activities and stemming the significant erosion of tax revenue, which has been estimated at nearly half a billion Ghana cedis due to the abuse of these exemptions.
Dr. Forson noted that all these VAT and tax reforms were expected to reduce fiscal risks to the national budget.
