Ghana is proposing an additional 1% addition to its existing Value Added Tax rate to help manage the worsening COVID-19 government deficit. This new “Health Levy” will help with expenditure on vaccinations, health facilities and related emergency spend. It is scheduled to come into effect from 1 May 2021
This would take the combined VAT and related levies to 18.5% on most supplies. However, the new charge would not be recoverable by businesses which incur it.
VAT is currently 12.5% in Ghana. In addition, there is a combined 5% Health and Education Levy (National Health Insurance Levy (NHIL) Education Trust Fund Levy (GETFL) on most taxable supplies of goods and services, including imported goods and services.
The tax authorities also offer a flat-rate VAT scheme for smaller businesses of 3% of taxable turnover. This too will be increased by the new COVID-19 Health Levy by 1% to 4%.
Ghana has also introduced a 5% Bank Levy.
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