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1% VAT change in Ghana with immediate effect

Tuesday 1st June 2021

The Parliament of Ghana has passed new tax laws to be implemented in 2021.
One of these laws that will affect our business is the COVID-19 Health Recovery Levy Act, 2021 (Act 1068) which states that:

  • Effective from May 1st, corporate organisations must impose a 1% levy on the supply of goods and services in the country (other than exempted goods and services) and the import of goods and services (other than exempt imports).
  • The Levy also applies to the supply of goods subject to the VAT Flat Rate.
  • The COVID-19 Health Recovery Levy is not allowable as an input tax deduction

Therefore, the new rate for VAT in Ghana is 19.25% effective 1st May, 2021.

The breakdown is as below:

Value Added Tax (VAT) – Standard Rate 12.50%
National Health Insurance Levy (NHIL) 2.50%
Ghana Education Trust Fund (GFL) 2.50%
1% COVID-19 Levy 1.00%
(VAT) on NHIL and GFL and 1% COVID-19 Levy* 0.75%
Total VAT 19.25%
* (12.5%*(2.5%+2.5%+1.0%))

Please download the official announcement here:  2021 LAWS AND AMENDMENTS ANNOUNCEMENTS