Ghana: New Ghana Vat Act Promulgated

Last Updated: 16 February 2014
Article by Celia Becker

The controversial Value Added Tax (Amendment) Bill that was approved by the Ghana Parliament on 15 November 2013 despite a walkout by minority members received Presidential assent on 30 December 2013 and was gazetted on 31 December 2013.

As a result, the Value Added Tax Act, 1998 (Act 546) as amended, has been repealed and replaced by the Value Added Tax Act, 2013, (Act 870) (the new VAT Act). The new VAT Act does not provide for an effective date of commencement and, consequently, becomes effective on 31 December 2013.

One of the most significant amendments is the increase in the standard VAT rate from 12.5% to 15%. The National Health Insurance Scheme Levy (NIHL) charged on goods and services supplied in or imported into Ghana and collected with VAT remains at 2.5%. As a result, the standard aggregate VAT and NHIL rate on the taxable supply of goods and services is increased from 15% to 17.5%.

Per official guidelines on the application of the New VAT Act issued by the Ghana Revenue Authority (GRA) in January 2014, the VAT rate on GRA VAT/NIHL invoices issued in respect of taxable supplies is to be manually adjusted from 12.5% to 15%.

Taxpayers who have been authorised by the GRA to use their own computer-generated invoices or electronic cash registers are required to re-programme their equipment to ensure that VAT is charged at the rate of 15%. Where these taxpayers are unable to use such computer-generated invoices or electronic cash receipts, they must use the manually adjusted GRA invoices as set out above.

A second significant change effected by the new VAT Act is the reduction of the allowable period for claiming input VAT in respect of expenses incurred from three years to six months. In practice, all taxpayers who are in possession of valid VAT/NIHL invoices for input claims which are more than six months old (i.e. dating from before 31 July 2013) should claim such amounts in their December 2013 VAT returns, which are due for submission by no later than 31 January 2014.

The new VAT Act also extends the application of VAT to the following business activities which hitherto fell outside the VAT net:

  • the sale of immovable property by an estate developer. 'Estate developer' is defined as a commercial establishment engaged in the business of the construction and sale of immovable property;
  • the supply of financial services rendered for a fee, commission or similar charge, including the provision of insurance, issue transfer, receipt of, or dealing with money, whether in domestic or foreign currency or any note or order of payment of money, provision of credit, or operation of a bank account or an account of a similar institution. Life insurance and reinsurance services are exempt;
  • a supply of domestic transportation of passengers by air and the supply of haulage as well as the rental or hiring of passenger and other vehicles;
  • the business activities of auctioneers and promoters of public entertainment;
  • the business of a gymnasium and spa; and
  • the manufacture or supply of pharmaceuticals listed under Chapter 30 of the Harmonized Systems Commodities Classification Code, 1999, other than supplies at the retail stage.

All businesses engaged in these activities that have not been registered for VAT/NIHL are obliged to contact their GRA local offices for VAT/NIHL in accordance with the provisions of the VAT Act.

All persons registered for VAT/NIHL that are authorised to operate under the VAT Flat Rate Scheme (VFRS) are to continue charging and accounting for VAT at the rate of 3% of the taxable value of their supplies until otherwise advised by the GRA in writing.

In other recent taxation developments in Ghana, Parliament has rejected the National Fiscal Stabilisation Levy (NFSL) (Amendment) Bill presented to it in November 2013. The NFSL, levied at 5% on profits before tax of specified companies, was reintroduced in June 2013 to apply to the 2013 and 2014 years of assessment. The Bill sought to revise the effective end date of the NFSL Act, 2013 from December 2014 to June 2014.

Parliament has passed the Customs and Excise Duties and other Taxes Amendments No 2 Bill on 13 December 2013, amending the Customs and Excise (Duties and Other Taxes) Act, 1996 (Act 512). In terms of the amendment, raw materials used for the manufacture of HIV/AIDS drugs and the printing of textbooks and exercise books are to be exempted from import duty.

The Bill is aimed at increasing competitiveness of local manufacturers. Currently, the importation of raw materials used in the manufacture of HIV/AIDS drugs and the printing of text and exercise books are subject to significant import duties, while the importation of the corresponding final products are zero rated. The relevant exemptions will be under the supervision of the Minister of Health and Education respectively.

Further proposed taxation amendments presented for parliamentary approval as part of the 2014 Budget and Financial Statement on 19 November 2013 include increasing the withholding tax rate on rental income from commercial buildings from 8% to 15% and the withholding tax rate on management and technical service fees from 15% to 20%, expanding the scope of capital gains tax to cover petroleum operations, increasing the road fund levy, reintroducing the Windfall Tax Bill on mining activities in for parliamentary consideration after due consideration with relevant stakeholders, introducing a Construction Industry Scheme (CIS) to regulate payments made by contractors to subcontractors in the building and construction industry and harmonizing and simplifying tax laws under a single Tax Administration Act.

An official at the Small Tax Office of the Domestic Tax Revenue Division of the Ghana Revenue Authority also announced at a seminar on 4 December that, with effect from the end of 2014, the possession of an 11-digit unique Taxpayer Identification Number would be a prerequisite for individuals earning taxable income to, inter alia, obtain travel visas.

The Ghana government is evidently serious about implementing its fiscal policy aimed at revenue mobilisation through tax effectiveness and efficiency and delivering on Minister Seth Terkper's pledge to narrow the budget gap by boosting revenue.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.