Ghana’s government has made a significant move to boost economic growth by abolishing the COVID-19 “Health Recovery Levy” and reducing the Value-Added Tax (VAT) rate. This decision is expected to put approximately GHS 5.7 billion ($520 million) back into the pockets of businesses and households in 2026.
The Finance Minister, Cassiel Ato Forson, announced these changes as part of a broader effort to modernize Ghana’s VAT system, ease the cost of doing business, and stimulate economic recovery. The VAT rate has been reduced from 21.9% to 20%, and the VAT registration threshold has been increased from GHS 200,000 to GHS 750,000, aiming to support small and medium enterprises.
Abolition of COVID-19 Levy puts GHS 3.7 billion back into the economy, VAT Rate Reduction from 21.9% to 20%, Increased VAT Registration Threshold from GHS 200,000 to GHS 750,000, VAT on Mineral Exploration abolished to revive investment in the mining sector, and VAT Zero-Rating on Local Textiles extended to 2028 to protect local jobs.
These reforms aim to create a more business-friendly environment, promote fairness, and simplify tax administration. The government expects these changes to drive economic growth, improve competitiveness, and increase investment in Ghana.
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