Gov’t to Scrap COVID Levy, Restore GETFund & NHIL Under VAT in Major Tax Overhaul

Accra, Ghana – The government has unveiled sweeping reforms to Ghana’s Value Added Tax (VAT) system, aimed at reducing the tax burden on households and businesses while enhancing compliance and efficiency.

Ghana Announces Major VAT Reforms to Ease Tax Burden and Improve Compliance

Key Reforms in the 2025 Budget

Presenting the 2025 Budget Statement and Economic Policy to Parliament, Finance Minister Dr. Cassiel Ato Forson outlined several critical changes, including:

• Abolition of the COVID-19 Levy
• Reintegration of GETFund and NHIL into the main VAT system
• Reduction of the effective VAT rate for households and businesses
• Reversal of the VAT flat rate regime
• Exemption of micro and small businesses from VAT collection by adjusting the registration threshold

“The parameters for the VAT reforms, which will be completed this year, include abolishing the COVID-19 Levy; reversing the decoupling of GETFund and NHIL from VAT; reducing the effective VAT rate for households and businesses; reversing the VAT flat rate regime; and exempting micro and small businesses from VAT collection by adjusting the registration threshold,” Dr. Forson announced.

Addressing Concerns Over Ghana’s Complex Tax Structure

The reforms come amid growing concerns over Ghana’s complicated tax regime, which businesses have long criticized for increasing the cost of doing business and imposing a heavy financial burden on consumers.

Currently, the GETFund and NHIL levies are charged separately from VAT, effectively increasing the real VAT rate to 19.25% instead of the standard 15%. The decision to reintegrate GETFund and NHIL into VAT aims to:

✅ Simplify tax administration
✅ Ease compliance for businesses
✅ Reduce the overall VAT burden

Additionally, raising the VAT registration threshold will relieve small businesses from VAT obligations, allowing them to grow without excessive tax pressures.

Next Steps: Parliamentary Deliberations and Public Awareness

The proposed reforms will undergo Parliamentary deliberations, with businesses and consumers closely monitoring how these changes will impact their financial obligations.

The Finance Minister also emphasized plans to reverse the VAT flat rate regime and launch public education campaigns to enhance compliance and efficiency in tax collection.

As Ghana moves forward with these landmark VAT reforms, stakeholders are optimistic that the changes will foster economic growth, investment, and business expansion in the country.