Accra: Mr. David Lartey Quarcoopome, Chief Revenue Officer and Domestic Tax Revenue Division (DTRD) Projects Coordinator at the Ghana Revenue Authority (GRA), announced that Ghana's new VAT law is projected to lower the effective tax burden on businesses and stimulate economic growth starting in 2026. Speaking at a media engagement organized by the Ghana Ports and Harbours Authority (GPHA), Mr. Quarcoopome highlighted the challenges businesses faced due to cumulative taxes and levies that had previously pushed the effective VAT rate to approximately 21.9 percent, thereby increasing operational costs.
According to Ghana News Agency, Mr. Quarcoopome explained that with the removal of the COVID-19 levy and the harmonization of VAT-related taxes, the effective VAT rate is anticipated to decrease to around 20 percent. The reforms under VAT Act 1151 of 2025 are designed to consolidate all VAT-related elements, eliminate fragmentation, and remove ambiguities that had previously caused confusion for both taxpayers and tax administrators.
Mr. Quarcoopome emphasized that these changes would enhance cash flow for businesses by enabling them to reclaim input tax on purchases instead of absorbing levies as business costs. He noted that the certainty provided by the new system, along with a reduced effective rate, is expected to improve compliance, widen the tax base, and offer relief to taxpayers.
He further mentioned that the reforms would aid businesses in pricing their goods more efficiently, improving competitiveness, and fostering enterprise growth.