Although no single legislative provision imposed a 21.9% rate, the combined structure produced an effective indirect tax burden of that magnitude on every standard-rated taxable supply. For businesses and consumers alike, this represented a significant departure from the stated 15% VAT rate.

 

A further structural issue compounded the problem. The NHIL, GETFund Levy, and COVID-19 Levy were not creditable as input tax under the previous regime. VAT-registered businesses could not recover these amounts through the input tax deduction mechanism; instead, the levies formed part of the cost base of taxable supplies. This feature meant that the cascading effect was not confined to final consumption. It was embedded within business-to-business transactions, compounding across supply chains and increasing the cost of production in sectors where taxable inputs passed through multiple stages of value addition. The result was a hidden tax on productive activity that undermined Ghana's competitiveness and often translated into additional costs passed on to the final consumer.

 

Over time, these features contributed to a VAT regime that was widely regarded as administratively complex, economically distortive, and increasingly misaligned with the core design principles of value added taxation. The system was ripe for reform, and the Value Added Tax Act, 2025 (Act 1151) (the New VAT Act), which came into force on 1 January 2026, represents the most significant overhaul of Ghana's indirect tax system in over a decade.

 

Key reforms under the new VAT regime

 

Three fundamental changes were introduced that together restructure the economics of indirect taxation in Ghana.

 

First, the COVID-19 Levy was abolished. Introduced in 2021 as a pandemic recovery financing measure, the levy had long since become detached from any credible ongoing policy justification. Its removal, therefore, reduces the nominal levy stack and directly lowers the effective rate on every taxable supply.

 

Second, the NHIL, GETFund Levy, and VAT are now recoupled to the same base. All three charges apply uniformly to the invoice value of the taxable supply, eliminating the cascade that previously saw VAT imposed on a base already inflated by the other levies. This structural correction alone removes a significant source of complexity and economic distortion from the system.

 

Third, and with the deepest operational consequence for VAT-registered businesses, the NHIL and GETFund Levy paid on inputs are now deductible as input tax. Under the previous regime, these levies were embedded costs that could not be recovered. Under the new VAT regime, effected by National Health Insurance (Amendment) Act, 2025 (Act 1156) and the Ghana Education Trust Fund (Amendment) Act, 2025 (Act 1155) they flow through the input tax credit mechanism in the same manner as VAT itself. This change materially improves the economics of VAT compliance for businesses operating across multiple stages of the supply chain, particularly those in manufacturing, construction, and other sectors with significant taxable inputs.

 

In combination, these three changes reduce the effective rate of indirect taxation from 21.9% to 20% and fundamentally improve the neutrality and efficiency of Ghana's VAT system.

 

Abolition of the VAT Flat Rate Scheme

The New VAT Act abolishes the VAT Flat Rate Scheme (VFRS), which had allowed certain businesses (principally retailers and wholesalers with turnover below a prescribed threshold) to account for VAT at a flat rate of 3% of the value of taxable supplies rather than tracking input and output VAT through the standard mechanism.

 

The VFRS was introduced as an administrative simplification for businesses that struggled with the record-keeping demands of the standard VAT scheme. Its practical effect, however, was to create a parallel VAT system with significantly lower compliance obligations and, in many cases, significantly lower effective VAT yields. The scheme was also susceptible to abuse, with some businesses that should have been on the standard scheme opting for VFRS to reduce their tax burden, and others understating turnover to remain within VFRS thresholds. The VFRS also fundamentally departed from the essence of VAT as a consumption tax – businesses subject to the scheme were disallowed from claiming input tax and thus suffered the tax on inputs (in theory at least), although in practice the input taxes suffered were passed on to consumers through increased prices.

 

Businesses previously operating under the VFRS must now migrate fully to the standard VAT system. This requires proper tracking, reporting, and reconciliation of input and output VAT, issuance of tax invoices that meet statutory requirements, and filing of periodic VAT returns. For many affected businesses, particularly smaller retailers and wholesalers, the transition represents a meaningful upgrade in accounting systems and record-keeping discipline. The GRA has indicated it will provide transitional guidance, but the compliance burden should not be understated.

 

Changes affecting the real estate sector

The real estate sector faces one of the most commercially significant VAT changes under the New VAT Act. Under the previous regime, estate developers (companies primarily engaged in property development and sales) benefited from a preferential 5% flat VAT rate on the supply of immovable property. This preferential rate was introduced to support housing development and improve affordability in a market characterised by significant housing deficits.

 

That preferential rate has now been abolished along with all other special VAT rates. The real estate sector now falls within the unified VAT framework, with the full effective rate of 20% applying to all taxable supplies of immovable property by VAT-registered developers. The quadrupling of the effective VAT rate represents a material increase in the tax cost embedded in new property transactions.

 

The commercial implications are significant. Developers will face a choice between absorbing the additional tax cost through margin compression or passing it through to purchasers in the form of higher prices. In a market where housing affordability is already severely constrained, price pass-through risks further excluding middle-income buyers from the formal property market. The reform may also affect the relative attractiveness of formal versus informal property transactions, with potential implications for land titling and property registration objectives.

 

Changes affecting fund management services

Fund management fees charged by a local fund manager for the management of a licensed private equity fund, venture capital fund, or mutual fund were treated as VAT-exempt under the repealed law. The policy rationale was that financial intermediation through collective investment vehicles serves a broader economic function, and that imposing VAT on the cost of managing those vehicles would raise the effective cost of investment products and deter participation in an already underdeveloped segment of Ghana's capital market.

 

Under the New VAT Act, fund management fees are now treated as taxable supplies subject to the standard 20% effective rate. This change aligns Ghana with a number of jurisdictions that have concluded that the efficiency costs of exempting financial services outweigh the policy benefits, and that fund management (unlike certain core banking activities) is sufficiently distinct to warrant inclusion in the VAT base.

 

The practical impact will be felt most acutely by institutional investors and high-net-worth individuals who allocate capital through Ghanaian-domiciled funds. The additional tax cost may reduce net returns and could influence fund structuring decisions, particularly for managers considering whether to domicile funds in Ghana or in competing jurisdictions with more favourable VAT treatment of financial services.

 

Increase in the VAT registration threshold

The New VAT Act increases the VAT registration threshold from GHS 200,000 to GHS 750,000 of annual taxable turnover. Businesses with turnover below this threshold are no longer required to register for VAT, file VAT returns, or charge VAT on their supplies.

 

The rationale for this increase is administrative simplification. The previous threshold, set at GHS 200,000 and unchanged for several years, had been significantly eroded by inflation, bringing an ever-larger population of small businesses into the VAT net. Many of these businesses lacked the administrative capacity to comply effectively, resulting in poor filing rates, limited revenue contribution, and disproportionate enforcement costs for the GRA. Raising the threshold removes these businesses from the formal VAT system, allowing the GRA to focus compliance resources on larger taxpayers with greater revenue potential.

 

The scale of the step change (from GHS 200,000 to GHS 750,000) does, however, create a cliff-edge effect. Businesses approaching the threshold have a strong incentive to manage reported turnover below it, either by deferring revenue recognition, splitting operations across multiple entities, or underreporting sales. The GRA will need to monitor this boundary carefully to prevent the threshold from becoming a tool for tax avoidance rather than administrative simplification.

 

Exemption for mineral exploration activities

In a notable concession to the extractives sector, the New VAT Act exempts supplies made to or by persons engaged in mineral exploration and reconnaissance activities. This change addresses a long-standing concern that the VAT system imposed a significant cost on pre-revenue exploration expenditure, effectively taxing the search for mineral deposits before any commercial return had been realised.

 

Exploration is inherently high-risk such that most exploration programmes do not result in commercially viable discoveries, and the capital invested is often lost entirely. Imposing VAT on exploration inputs increased the effective cost of this activity and placed Ghana at a competitive disadvantage relative to jurisdictions that offered more favourable treatment of pre-production expenditure. The exemption removes this structural disincentive and may encourage greater exploration investment, which is essential for replenishing Ghana's mineral reserves over the long term.

 

Consolidation of the VAT Act

The New VAT Act also consolidates the VAT legislative framework. Prior to its enactment, the VAT regime was spread across the old law and a series of amending Acts each addressing specific gaps or policy adjustments without restating the principal Act. The cumulative effect was a body of legislation that was difficult to navigate and, in places, internally inconsistent. The New VAT Act repeals and replaces that entire framework, consolidating the rules governing taxable supplies, exemptions, zero-rating, registration, returns, and enforcement into a single instrument.

 

Operationalisation of the Independent Tax Appeals Board

The Revenue Administration Regulations, 2025 (LI 2513) (the RAR) came into force on 7 November 2025, providing the procedural framework necessary to operationalise the Independent Tax Appeals Board (ITAB). The ITAB was established under the Revenue Administration (Amendment) Act, 2020 (Act 1029) as a quasi-judicial body mandated to hear and determine appeals against objection decisions of the Commissioner-General, providing an independent layer of administrative review between the GRA and the courts.

 

The establishment of the ITAB was widely welcomed by the tax community. Prior to its creation, taxpayers dissatisfied with a GRA objection decision had no intermediate recourse other than litigation in the High Court, a process that is costly, time-consuming, and often inaccessible for smaller taxpayers. The ITAB was intended to provide a faster, more accessible, and more specialised forum for resolving tax disputes, staffed by members with relevant expertise in tax and accounting matters.

 

The ITAB's first members were inaugurated in May 2023. Its operationalisation, however, was significantly delayed. The implementing regulations that would govern its procedures, timelines, evidence rules, and decision-making processes remained in draft form through 2023 and 2024, leaving the ITAB unable to hear cases despite its formal establishment. This delay frustrated taxpayers who had expected the ITAB to become functional shortly after its members were appointed.

 

With the RAR now in force, the ITAB is operational and serves as the mandatory first forum for all tax appeals. Taxpayers dissatisfied with an objection decision of the Commissioner-General must now initiate their appeal at the ITAB rather than proceeding directly to the High Court. A taxpayer dissatisfied with an ITAB decision retains the right to appeal to the High Court within 30 days of receiving the ITAB's decision.

 

The operationalisation of the ITAB represents a significant development in Ghana's tax dispute resolution framework. In theory, it should reduce the burden on the High Court, provide faster resolution of disputes, and improve access to justice for smaller taxpayers. In practice, the ITAB's effectiveness will depend on its capacity to hear cases efficiently, the quality and consistency of its decisions, and the willingness of both the GRA and taxpayers to engage constructively with the new forum. 2026 will be the first full year of ITAB operations, and its performance will be closely watched by the tax community.

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Case law developments

The 2025 judicial year produced a body of tax decisions that, taken together, significantly advance the understanding of Ghana's tax law and the boundaries of administrative power. Each decision carries implications that extend well beyond the parties before the court and will shape tax administration and dispute resolution in the years ahead. Considering that Ghanaian tax law jurisprudence has long suffered a dearth of cases, it is refreshing to note that taxpayers and the GRA alike are increasingly seeking the intervention of the courts in the enforcement of rights and interpretation of grey areas in the tax laws.

 

Maersk Drillship IV Singapore Pte Ltd v Commissioner-General, GRA

The GRA assessed Maersk Drillship IV, a Singapore-incorporated subcontractor operating under ENI’s Offshore Cape Three Points Petroleum Agreement (the PA), approximately USD 28.4 million in branch profit tax, additional corporate income tax, PAYE, withholding tax, and VAT/NHIL. The GRA's position was that notwithstanding the PA, the Income Tax Act, 2015 (Act 896) (the ITA) and the Internal Revenue Act, 2000 (Act 592) applied to Maersk’s income, including profits repatriated from its Ghanaian permanent establishment, which the GRA contended were subject to branch profit tax.

 

Maersk contended that the PA, which had been ratified by Parliament in 2006, contained a fiscal stability clause that froze the applicable tax regime as at the effective date of the agreement and that the PA exhaustively listed the taxes applicable to the contractor and its subcontractors (including Maersk). On that basis, Maersk argued that it was a designated beneficiary of the fiscal provisions under the PA and its income tax liability was confined to the 5% final withholding tax under section 27 of the Petroleum Income Tax Law, 1987 (PNDC Law 188). Both the High Court and the Court of Appeal rejected this argument and applied branch profit tax to the repatriated profits.

 

The Supreme Court allowed the appeal and set aside the concurrent judgments of the lower courts. The Court held that the PA clearly and exhaustively limited the taxes applicable to the contractor and its subcontractors to those expressly stated in the agreement, and that additional tax liabilities could not be imposed through implication or subsequent legislation. Because the fiscal stability clause had been ratified by Parliament, it possessed the force of law and guaranteed that only the tax regime referenced in the PA would apply for the duration of the agreement. The Court emphasised that the stability clause was a fundamental component of the investment framework and could not be unilaterally varied by administrative action or new legislation. The Court further held that the Maersk branch in Ghana, as an external company, was not a separate legal entity from the Singapore parent. Accordingly, the GRA’s attempt to characterise the Ghanaian branch as the subcontractor - while treating the Singapore entity as falling outside that definition - lacked merit.

 

The decision confirms that a fiscal stability clause in a parliamentary-ratified petroleum agreement can effectively lock in the fiscal regime applicable to contractors and subcontractors, and that subsequent tax legislation cannot expand that liability. Given the long-term and capital-intensive nature of petroleum projects, the judgment reinforces the legal force of fiscal stability provisions and provides investors with greater certainty that the fiscal commitments contained in such agreements will be respected by the courts. For the GRA, the decision narrows the scope for applying new tax measures to operations covered by existing stability agreements, and signals that attempts to expand tax liability beyond the agreed framework will not survive judicial scrutiny.

 

The Supreme Court’s conferment of the force of law on agreements ratified by Parliament is concerning and may have far-reaching, unintended consequences. Chief among these is the implication that an agreement with the government could override or amend existing law simply by virtue of parliamentary ratification. This would be problematic: until Parliament amends a law through the constitutionally prescribed legislative process, both the central government and Parliament itself must comply with the existing law. Agreements entered into by the government are therefore subject to the existing law. Such agreements bind the parties inter se but do not acquire the force of law merely through parliamentary ratification—a process that the Constitution does not recognise as law-making. As Atuguba JSC observed in John Akparibo Ndebugri v Attorney-General & Others,[2] parliamentary approval or ratification of an executive act does not transform it into a statute; the requirement exists solely to ensure transparency, openness, and parliamentary consent in the national interest. The Supreme Court’s reasoning in the Maersk Drillship case therefore marks a significant departure from Ndebugri, effectively deeming ratification as a law-making step. This reasoning creates a significant constitutional issue: can ratification of an agreement be construed as amending an existing statute, thereby sidestepping the law-making procedures under the Constitution?

 

Perseus Mining Ghana Limited v Commissioner-General, GRA

Following a successful appeal by Perseus at the Court of Appeal against a USD 7.5 million tax assessment, the GRA filed a notice of appeal to the Supreme Court without first seeking special leave as required by Article 131(2) of the 1992 Constitution. The Supreme Court dismissed the appeal as a constitutional nullity. The Court held that where a tax dispute originates in an administrative decision and the High Court exercises appellate jurisdiction (reviewing a decision of the Commissioner-General rather than hearing an original case), an appeal to the Supreme Court lies only with special leave under Article 131(2) of the Constitution. The GRA's failure to seek that leave rendered its notice of appeal void from inception.

 

The key implication of this decision is procedural. The jurisdictional pathway to the Supreme Court in tax matters is not automatic. Where the High Court has reviewed an administrative decision on appeal, special leave is required for any further appeal.

 

Agility Distribution Parks Ghana Limited v Commissioner-General, GRA

Delivered in January 2026 but arising from a dispute squarely within the 2025 review period, this decision is a landmark for tax refund litigation. Agility had overpaid over GHS 12 million in VAT, NHIL, and corporate income tax, a position the GRA admitted. Despite this admission, the GRA refused a cash refund, instead offering only a tax credit to be carried forward against future liabilities. The GRA relied on section 50(1) of the repealed VAT Act to argue that cash VAT refunds were available only to exporters, and that non-exporting businesses were limited to credit offsets.

 

The Court of Appeal reversed the High Court and ordered full cash payment. The Court held that section 50(3) of the repealed VAT Act expressly preserved the right to refund outside the exporter context, that section 50(5) of the repealed VAT Act and section 68 of the RAA were in harmony rather than in conflict, and that both provisions supported the taxpayer's entitlement to a cash refund of admitted overpayments. The Court further held that forcing a taxpayer to carry forward an admitted overpayment indefinitely as a credit, without any time limit or guarantee of utilisation, amounted to an unlawful appropriation of the taxpayer's funds and effectively imposed an unauthorised tax on productive activity. Mandamus was granted, compelling the GRA to make the refund.

 

The judgment confirms that non-exporting businesses have a clear and enforceable right to cash refunds of excess tax under the RAA, and that the GRA's longstanding practice of defaulting to tax credits rather than refunds, particularly in the VAT context, has no statutory foundation and is susceptible to legal challenge. The decision is particularly significant given the recent reduction in the statutory ceiling of the Tax Refund Account from 6% to 4% of total tax revenue. As refund claims increase and compete for a smaller allocation, taxpayers armed with the Agility precedent are better positioned to insist on cash refunds rather than indefinite credit carry-forwards. The GRA, for its part, will need to revisit its refund administration practices to ensure compliance with this judgment.

 

Kenashmi Ghana Limited v Commissioner-General, GRA

Kenashmi Ghana Limited, an importer, petitioned the Commissioner-General for a downward review of the FOB values applied to fifteen containers of tomato paste imported in 2018. The GRA took over seven months to respond, ultimately accepting Kenashmi's proposed values. By that time, however, several containers had already been auctioned to third parties. Kenashmi commenced proceedings seeking recovery of the value of four containers, alleging that the GRA had failed to comply with statutory procedures governing seizure and auction.

 

The High Court gave judgment in favour of Kenashmi, awarding USD 57,883.40 plus interest, damages, and costs. The Court held that where an objection is ultimately accepted, the delay in resolving the dispute cannot be used to penalise the taxpayer through seizure and auction during the pendency of the objection. The Court further held that the GRA had failed to comply with mandatory statutory procedures, including the requirement to give written notice of seizure and to gazette notice of auction at least 14 days before the sale.

 

The decision reinforces that taxpayers have a right to petition for review of customs valuations and are entitled to a response within a reasonable time. It also confirms that the GRA must comply strictly with statutory procedures governing seizure and auction, and that failure to do so will result in liability for losses.

 

 

M & C Logistics and Trading Limited v Iddrisu Ventures

M & C Logistics, a licensed gold purchaser, bought gold bars from Iddrisu Ventures between 2017 and 2018. M & C Logistics contended that it had paid the full purchase price inclusive of WHT, on the understanding that the seller would remit the 3% WHT to the GRA. When the GRA assessed M & C Logistics for unpaid WHT of GHS 701,839.31, the company sought to recover the amount from the seller.

 

The High Court found in favour of the seller. The Court held that under section 85(2) of the ITA, the obligation to withhold tax on purchases of unprocessed precious minerals rests on the person making payment, not the recipient. Accordingly, M & C Logistics, as purchaser, was the statutory withholding agent and remained liable to the GRA regardless of any private arrangement with the seller.

 

The decision confirms that the statutory obligation to withhold and remit tax on purchases of unprocessed precious minerals lies with the purchaser and cannot be delegated or transferred to the seller through private agreement.

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