The Value Added Tax Act, 2025 (Act 1151) took effect on 1 January 2026. The flat rate scheme is gone, the levies have been recoupled — and the registration threshold has been removed entirely for services. Here is what that means for your business.
The Value Added Tax Act, 2025 (Act 1151) took effect on 1 January 2026 and changed the shape of VAT for almost every business in Ghana — and for small service businesses, it changed everything.
What changed
- The COVID-19 Health Recovery Levy was repealed.
- NHIL and the GETFund levy were recoupled into the VAT base and are now recoverable as input tax, dropping the effective burden from about 21.9 per cent to 20 per cent.
- The VAT flat rate scheme was abolished outright. Businesses that used to charge 3 or 4 per cent on the flat rate now operate the standard mechanism, with input tax recovery.
- The registration threshold rose to GH¢750,000 for taxable goods — but was removed entirely for services.
Why the last point matters most
Every service provider is now required to register for VAT, regardless of turnover. The consultant, the caterer, the salon, the private school, the law practice, the clinic, the transport operator — if you sell services, the threshold that used to keep you out of the VAT net no longer exists. A large population of small service businesses is now inside the net, and most of them do not yet know it.
What you should do now
- Confirm your position. If you supply services and are not registered, that gap is accruing exposure every month.
- Register and set up properly. Registration, invoicing, input tax recovery and the monthly return cycle need to be set up once, correctly.
- Reprice deliberately. Moving from the flat rate (or from no VAT) to the standard mechanism changes your pricing and your margins. Model it before the GRA models it for you.
YSK Partners handles VAT registration, monthly returns and the transition from the old rules — and can run a quick health check on where you currently stand. Talk to us.