Commissioner-General of the Ghana Revenue Authority (GRA), Anthony Sarpong, says Ghana’s newly approved Value Added Tax (VAT) reforms have been well received by businesses and the general public, but insists that sustained compliance and enforcement will be critical to ensuring the reforms deliver their intended revenue and economic benefits.
Speaking to journalists on the sidelines after appearing before Parliament’s Public Accounts Committee (PAC), Mr. Sarpong said the Authority is encouraged by early signals from the market but remains focused on embedding the reforms into everyday business practices.
“It is going well. The response has been positive,” he said. “However, we will continue with compliance and enforcement to ensure that these reforms stick and become part of business processes. At the same time, we will leverage VAT as a tax type to raise the needed revenue to support government’s 2026 development agenda.”
Mr. Sarpong had appeared before the Committee to assist in considering the Auditor-General’s report on the management of Petroleum Funds for 2024.
Revenue Outlook Encouraging
The GRA Commissioner-General noted that extensive impact assessments were conducted even before the VAT amendment bill was laid before Parliament, giving the Authority confidence that the reforms will not erode government revenue.
“The signals are very positive. Before the bill was introduced, we undertook a comprehensive assessment to determine the revenue impact,” he explained. “We do not believe these reforms will result in revenue loss. On the contrary, we strongly anticipate that they will improve revenue performance.”
He described the VAT changes as part of a broader, coordinated reform agenda being implemented in collaboration with the Ministry of Finance to modernise VAT administration, reduce distortions, and enhance voluntary compliance.
Key Features of the VAT Reforms
Mr. Sarpong highlighted several major policy measures introduced under the reforms, including:
The abolition of the COVID-19 Health Recovery Levy;
The removal of VAT decoupling, allowing businesses to fully claim input VAT—previously about six per cent was not claimable;
An increase in the VAT registration threshold from GHS 200,000 to GHS 750,000, exempting smaller businesses that lack the capacity to fully account for VAT; and
Reforms aimed at simplifying VAT administration and improving input tax recovery.
He noted that these measures are designed to reduce the tax burden on consumers, support small businesses, and improve overall compliance.
“We believe the reforms have been taken well by businesses and Ghanaians,” he said. “As of last week, our teams visited major retail outlets and we were satisfied that most businesses are applying the new VAT requirements. This ensures that consumers directly benefit from the abolition of the COVID-19 levy.”
According to Mr. Sarpong, government estimates indicate that abolishing the levy could return close to GH¢6 billion to households through lower prices and reduced tax pass-throughs.
Call for Voluntary Compliance
Reiterating the nature of VAT as a consumption tax, the Commissioner-General stressed that rising population and consumption levels make VAT a critical and sustainable revenue source.
“VAT is a consumption tax. As our population grows and consumption increases, VAT revenue should also rise,” he said. “Our call to businesses is simple: know your taxes, voluntarily pay them, and let us build Ghana together.”
He also appealed directly to consumers to play their part in strengthening compliance.
“Anytime you make a purchase, ask for your VAT receipt. When you do that, you ensure that the tax you’ve paid actually goes into government coffers to support national development.”
Parliament Approves Major VAT Overhaul
Parliament has approved sweeping VAT reforms under the Value Added Tax Act, 2025 (Act 1151), which take effect from January 1, 2026. The changes consolidate the VAT rate into a unified 20 per cent, replacing the previous structure of 15 per cent VAT plus the 2.5 per cent National Health Insurance Levy (NHIL) and 2.5 per cent GETFund levy.
The reforms also abolish the COVID-19 Levy, eliminate the VAT Flat Rate Scheme to enhance input tax recovery, and raise the VAT registration threshold to protect small businesses. Government says the measures are aimed at simplifying administration, reducing cascading taxes, and boosting compliance.
Recovery of Petroleum Surface Rental Arrears
On the management of Petroleum Funds, Mr. Sarpong told the PAC that the GRA has so far recovered US$315,600 and US$1.7 million from three companies whose contracts were terminated after defaulting on surface rental fee payments in 2023 and 2024.
He disclosed that the Authority is working closely with the Petroleum Commission to recover outstanding balances from the affected firms.
“We have established information-sharing channels with these companies to ensure that all outstanding amounts are fully settled,” he said, adding that companies currently operating in the surface rental space are fully up to date with their payments as of 2025.
The Auditor-General’s report revealed that late payment of surface rental fees amounted to GH¢2.7 million in 2023 and GH¢2.9 million in 2024. A representative of the Petroleum Commission told the Committee that the contracts of the defaulting companies had been terminated as far back as April 2021.
