Understanding Ghana's VAT System in 2025

Ghana's Value Added Tax (VAT) system is administered by the Ghana Revenue Authority (GRA) and applies to the supply of goods and services in Ghana, as well as imports. Understanding your VAT obligations is critical to maintaining compliance and avoiding penalties.

Who must register for VAT?

Any business with an annual taxable turnover exceeding GHS 500,000 is required to register for VAT under the standard rate scheme. Businesses below this threshold may register voluntarily or opt for the VAT Flat Rate Scheme (VFRS).

Standard Rate vs Flat Rate Scheme

The standard VAT rate is 15%, applied on the value of taxable supply. Additionally, businesses must account for the Ghana Education Trust Fund Levy (GETFund) of 2.5% and the National Health Insurance Levy (NHIL) of 2.5%, bringing the effective rate to 21.9% inclusive of all levies.

The VAT Flat Rate Scheme (VFRS) allows eligible retailers with turnover below GHS 500,000 to charge a flat 4% on taxable supplies. This scheme simplifies compliance for smaller businesses but does not allow input tax credits.

Filing obligations

VAT-registered businesses must file monthly VAT returns by the last working day of the month following the tax period. Late filing attracts penalties of GHS 500 per month for individuals and GHS 1,000 per month for companies.

Input tax credits

Under the standard rate scheme, businesses can claim input tax credits for VAT paid on business purchases. Proper documentation — including original VAT invoices — is essential for claiming these credits.

Practical compliance tips

Maintain a VAT account in your accounting records separating input and output VAT. Issue proper VAT invoices for all taxable supplies. File returns on time even if no VAT is payable. Keep supporting documents for at least six years.

If you are unsure about your VAT obligations or need assistance with registration and filing, the Erano Consulting tax team is available for a free initial consultation.