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Ghana's VAT Act 1151: Key Changes That Will Affect Your Prices, Cash Flow, and Compliance

  • Writer: Kesmic Compliance Team
    Kesmic Compliance Team
  • Jan 2
  • 3 min read

Ghana's VAT Act 1151: Key Changes That Will Affect Your Prices, Cash Flow, and Compliance

While many of us were celebrating the arrival of 2026, the tax landscape in Ghana shifted beneath our feet.


As of yesterday, January 1, 2026, the new Value Added Tax Act, 2025 (Act 1151) is officially in effect. If you are doing business in Ghana today, be it general trading, consulting, importing or operating a shop, the rules you played by last year might now be putting you at risk of non-compliance.


At Kesmic, we know tax documents can be dry and confusing. We have analysed the VAT Administrative Guidelines released by the GRA on December 31st and broken them down into plain terms.


Here is what you need to know immediately to keep your business safe.


  1. The "No Threshold" Rule for Service Providers

This is perhaps the most critical change for professionals. In the past, many small service providers flew under the radar because their revenue wasn't high enough to mandate VAT registration. There is now no registration threshold for service providers. This means if you provide a service, such as consultancy, repairs, legal, or accounting work, you are required to register for VAT.

  • The Deadline: If you are already in business, or starting today, you must register within 30 days.

  • Event Promoters: Planning a concert or a "bash"? You must register at least 48 hours before the event starts.


  1. The GHS 750,000 Mark for Supply of Goods

If you sell physical goods like retailers, wholesalers, or manufacturers, the rules are slightly different. You are required to register for VAT only if your taxable supplies exceed GHS 750,000 in a 12-month period or less.This is not just about looking backward. If there are "reasonable grounds" to anticipate that you will exceed the GHS 750,000 threshold in the next 12 months, you are also required to register.


  1. Importers: The 20% "Penalty"

Importers face one of the most immediate enforcement tools under VAT Act 1151.

  • If you import taxable goods valued over GHS 750,000 and are not registered for VAT, you will be charged an Upfront Payment of 20% on the customs value.

  • Note, this is not a substitute for your regular taxes. It is payable in addition to all standard customs duties, Import VAT, and levies.

  • You can get this money back but only after registering for VAT, filing your returns, and then apply to the Commissioner-General for recovery.


  1. Critical Transitional Rules

There are two vital administrative instructions for businesses caught between the old and new systems.

  • If you were previously registered under the Flat Rate Scheme, you are now required to start charging VAT at the standard rate immediately. You must return all your old Flat Rate VAT booklets to the GRA and replace them with new Standard Rate booklets.

  • If you deal in goods but your turnover is below the new GHS 750,000 threshold, you cannot simply stop charging VAT today. You must continue to charge VAT and file returns until the GRA officially verifies your status and deregisters you. If you stop before you are formally deregistered, you are breaking the law.


  1. The Good News: End of the "Cascading" Effect

The standard VAT rate is confirmed at 15%, but the math has changed in your favour. Under the old system, levies were often added to the cost first, swelling the amount on which VAT was calculated (a "tax on tax").

Under Act 1151:

  • You now calculate VAT, NHIL, and GETFund side-by-side on the base price. You do not add the levies to the cost before computing the VAT. The Tourism Levy follows this same structure.

  • For electronic communication services, the cascading effect remains. The Communication Service Tax (CST) is still added to the cost first.

  • The COVID-19 Health Recovery Levy is officially repealed. If your invoice books still have a slot for it, ignore it.


Don't Panic. Get Compliant with Ghana's VAT Act 1151

The shift to Act 1151 is significant, but you do not have to navigate it alone. Whether you need to determine your registration status or manage the transition from Flat Rate to Standard Rate, Kesmic is ready to help. We are currently reviewing client portfolios to ensure no one is hit with unexpected penalties or upfront import charges.


Contact us today for a VAT Health Check and start 2026 with confidence.


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