Ghana VAT 2026: The New 20% Rate and How to Calculate It

Ghana's VAT changed on 1 January 2026. Under the Value Added Tax Act, 2025 (Act 1151), the National Health Insurance Levy (NHIL) and GETFund Levy no longer stack on top of each other before VAT is charged — all three are now worked out on the same selling price, for a combined headline rate of 20% (15% VAT + 2.5% NHIL + 2.5% GETFund), according to the Ghana Revenue Authority (GRA). That ends the old "tax on tax" effect that pushed the real cost to about 21.9%, per the Ghana News Agency's report on GRA's own clarification. The 1% COVID-19 Health Recovery Levy is gone completely, and the VAT registration threshold for businesses that sell goods has jumped from GH₵200,000 to GH₵750,000 a year. As of October 2026, here's exactly how the new system works, GRA's own worked example, and who actually has to register.

Quick facts: old VAT system vs new

Source: GRA, "New VAT rate" and Ghana News Agency, 11 February 2026.

What actually changed under Act 1151?

Before 2026, Ghana charged VAT on a price that already had the NHIL, GETFund and COVID-19 levies added to it — tax calculated on tax. GRA's own worked example shows what that cost on a GH₵1,000 item: NHIL (GH₵25) + GETFund (GH₵25) + COVID-19 levy (GH₵10) pushed the taxable value to GH₵1,060, then 15% VAT on that (GH₵159) brought the total to GH₵1,219.

From 1 January 2026, each levy is calculated on the original GH₵1,000 selling price instead: NHIL (GH₵25) + GETFund (GH₵25) + VAT (GH₵150) = GH₵1,200. Same item, GH₵19 cheaper, and GRA's own page states plainly that this "indicat[es] a reduction in price." The VAT flat rate schemes that let some retailers and property sellers pay a flat 3% or 5% instead have also been scrapped, so those businesses now use the standard calculation too.

How to calculate VAT in Ghana now

The maths is simpler than before. On any VAT-able selling price, add:

1. 15% VAT
2. 2.5% NHIL (National Health Insurance Levy)
3. 2.5% GETFund Levy

All three are worked out on the same selling price and added together — so the shortcut is just selling price × 1.20.

Say you're pricing a fridge at GH₵2,500 before tax. Multiply by 1.20 and the shelf price is GH₵3,000 — not the roughly GH₵3,048 it would have cost under last year's cascading formula. If you're working out your own take-home pay rather than a sale price, that's a different tax entirely — use our Ghana PAYE calculator for that.

Who has to register for VAT in Ghana now?

• If you sell goods: you must register once your annual turnover passes GH₵750,000 — up from GH₵200,000. Below that, you're exempt from VAT obligations, which GRA says is meant to keep micro and small traders out of the system.
• If you sell services: there's no threshold at all. As Dr Dominic Naab, Acting Head of GRA's Strategy and Research Department, told Citi Newsroom, "the GH¢750,000 threshold is only applicable to the supply of goods... For the supply of services, there is no threshold." If you invoice for services — consulting, design, repairs, professional work — you're legally required to register regardless of how little you earn.

To register, you need a Ghana Card-linked TIN (see our guide on checking or getting a Ghana TIN) and, if you're trading as a company or business name, you'll usually have gone through the ORC first — our guide to registering a business in Ghana covers that process and its costs.

What to watch out for

• Old invoices still showing 21.9% or separate stacked levies. GRA's Commissioner-General, Anthony Sarpong, has told taxpayers to update their invoicing systems and Fiscal Electronic Devices (FEDs) to show the new 20% rate. If a supplier hands you a receipt still breaking out the old COVID-19 levy or using last year's formula, it hasn't been updated.
• Assuming the GH₵750,000 threshold covers everyone. It only applies if you sell goods. Plenty of service providers wrongly assume they're exempt because they're small — the law doesn't give them that pass.
• Confusing "20% VAT" with a single tax. It's three separate charges — VAT, NHIL and GETFund — that happen to add up to 20% on the same base. They're reported and remitted differently even though the customer just sees one combined price.
• Flat-rate retailers caught out. If you were using the old 3% VAT flat rate scheme, it no longer exists — check with GRA or your accountant on moving to the standard method before your next filing.

If you're running a business and this is the first new tax rule you've had to apply, pair it with our SSNIT contributions guide and PAYE guide — between VAT, SSNIT and PAYE, those are the three deductions that catch most new Ghanaian business owners off guard.

Frequently asked questions

What is the VAT rate in Ghana in 2026?

A combined 20%: 15% standard VAT, 2.5% NHIL and 2.5% GETFund Levy, all calculated on the same selling price. This took effect on 1 January 2026 under the VAT Act, 2025 (Act 1151).

Is the new Ghana VAT rate higher or lower than before?

Lower, in real terms. The headline rate looks similar, but the old system charged VAT on a price that already included NHIL, GETFund and a 1% COVID-19 levy, pushing the real cost to about 21.9%. The new system removes that stacking, so the same GH₵1,000 item that cost GH₵1,219 now costs GH₵1,200.

Who has to register for VAT in Ghana now?

Goods businesses once their annual turnover passes GH₵750,000 (up from GH₵200,000). Services businesses have no threshold at all and must register no matter how small their turnover is.

What happened to the COVID-19 Health Recovery Levy?

It's been abolished entirely as part of the same reform, along with the old VAT flat rate schemes for retailers (3%) and immovable property sellers (5%).

How do I work out VAT on a price myself?

Multiply the price before tax by 1.20. That single multiplier covers the 15% VAT, 2.5% NHIL and 2.5% GETFund together, since all three now apply to the same base price.

Do I need a TIN to register for VAT in Ghana?

Yes. For individuals, your Ghana Card PIN acts as your TIN; registered companies get a separate GRA-issued TIN, as covered in our TIN guide above.