Finance Minister Dr. Cassiel Ato Forson has announced a major financial boost to households and the private sector through a comprehensive overhaul of Ghana’s Value Added Tax (VAT) system.
Presenting the 2026 Budget Statement, Dr. Forson explained the direct impact of the reforms.
“Mr. Speaker, by abolishing the COVID-19 levy, Government is putting GH₵3.7 billion back into the pockets of individuals and businesses in 2026 alone,” he said.
Among the key measures, the government has restored input tax deductions on the GETFund and NHIL levies, allowing businesses to offset these levies against VAT liabilities.
“Mr. Speaker, these reforms will also reduce the cost of doing business by 5 percent as a result of subjecting the GETFund and NHIL levies to input-output deductibility,” he added. In addition, the effective VAT rate has been lowered from 21.9 percent to 20 percent, providing further relief on goods and services.
The VAT registration threshold has also been raised significantly, from GH¢200,000 to GH¢750,000, easing the burden on thousands of small and medium-sized enterprises (SMEs).
Targeted industry measures include the removal of VAT on reconnaissance and prospecting of minerals to encourage upstream investment, while the zero-rating of locally manufactured textiles has been extended to 2028, ensuring continued support for the domestic textile sector.
Together, these reforms signal a deliberate effort to stimulate economic growth, reduce costs for businesses and households, and strengthen the private sector following years of fiscal consolidation.
Overall, the VAT reforms in the 2026 Budget aim to ease financial pressures on households and businesses, enhance private sector capacity, and drive sustainable economic growth.