The government has announced sweeping reforms to Ghana's Value Added Tax (VAT) system, aimed at reducing the tax burden on households and businesses while improving compliance and efficiency.

Presenting the budget to Parliament, the Finance Minister outlined key changes, including the abolition of the COVID-19 Levy, the reinstatement of GETFund and NHIL under the main VAT system, and measures to ease tax obligations for micro and small businesses. "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," the Minister stated.

The planned reforms come amid growing concerns over Ghana's complex tax structure, which has been criticized for increasing the cost of doing business and placing a heavy burden on consumers.

Currently, the GETFund and NHIL levies are charged separately from VAT, effectively increasing the real VAT impact to around 19.25% rather than the standard 15%.