The government has begun implementing new Value Added Tax (VAT) reforms from January 1, 2026, aimed at reducing the tax burden on households and businesses while improving efficiency in the tax system.

In a statement, the Ministry of Finance announced the abolition of the COVID-19 Levy, a move expected to return approximately GH¢3.7 billion to individuals and businesses in 2026.

The VAT rate has also been reduced to 20 percent, a measure designed to offer relief to consumers and support enterprises grappling with high operating costs. Additionally, the GETFund Levy and the National Health Insurance Levy (NHIL) have been made input-output deductible, a reform the government estimates will lower the cost of doing business by about five percent.

As part of the changes, the VAT registration threshold for businesses dealing in goods has been increased significantly. Firms will now be required to register only if their annual turnover exceeds GH¢750,000, compared to the previous threshold of GH¢200,000.

The long-standing VAT Flat Rate Scheme has also been scrapped and replaced with a unified and more transparent VAT structure to simplify compliance and enhance accountability.

Overall, the Ministry of Finance says the reforms are expected to return nearly GH¢6 billion to households and businesses in 2026, describing the measures as a key component of the government’s broader strategy to reset the economy, stimulate growth, create jobs and drive economic transformation.