The Ghana Revenue Authority (GRA) has reiterated that businesses engaged in taxable activities with an annual turnover exceeding GH¢750,000 are legally required to register for Value Added Tax (VAT), as the authority intensifies a nationwide compliance drive.
Dr. Dominic Naab, Acting Deputy Commissioner of Strategy, Research and Policy, and Head of VAT Administration at the GRA, said businesses that meet the threshold must register and obtain a VAT registration certificate from the authority.
Speaking to Isaac Addae on Morning Starr on Starr FM, Dr. Naab explained that businesses involved in taxable activities must first meet the prescribed turnover threshold before they are required to register for VAT.
“If you deal in taxable activity, you should register. But before you register, you have to meet the threshold. The threshold is 750,000. So once your turnover is above that, they are required to register for the VAT,” he said.
Threshold applies only to goods, not services
The GRA has previously clarified that the GH¢750,000 annual turnover threshold applies exclusively to businesses supplying goods, and does not extend to service providers. Dr. Naab explained during a public lecture following the implementation of the VAT reforms that “for the supply of services, there is no threshold”.
This means the Commissioner-General is legally required to ensure “every person providing services registers for VAT,” regardless of their revenue. The distinction creates a compliance divide between goods suppliers and service providers, with service businesses of all sizes required to register within 30 days.
Background: The 2026 VAT reforms
The GH¢750,000 threshold represents a significant increase from the previous GH¢200,000 limit and forms part of a comprehensive package of VAT reforms introduced under the Value Added Tax Act, 2025 (Act 1151), which took effect on 1 January 2026.
The reforms were announced in the 2026 Budget Statement and Economic Policy presented to Parliament by Finance Minister Dr. Cassiel Ato Forson on 13 November 2025, under the theme “Resetting for Growth, Jobs and Economic Transformation”.
Key measures under the new VAT regime include the abolition of the COVID-19 Health Recovery Levy, the reduction of the effective VAT rate from 21.9% to 20%, the elimination of the VAT flat rate scheme, and the re-coupling of the National Health Insurance Levy (NHIL) and Ghana Education Trust Fund Levy (GETFund) with the VAT base to allow input tax deductions.
The government said the reforms, including the threshold increase, are expected to return nearly GH¢6 billion to households and businesses while reducing compliance obligations for micro and small enterprises.
Consumer rights and compliance campaign
Dr. Naab urged consumers to be mindful of the VAT status of businesses when purchasing goods and services and to demand valid VAT invoices from registered businesses. According to him, advertised prices by VAT-registered businesses should be VAT-inclusive, meaning consumers should not be required to pay an additional VAT amount on top of the advertised price.
The clarification forms part of the GRA’s National VAT Awareness and Compliance Campaign, launched on 22 September 2026 in Accra under the theme “Request Your VAT Invoice, Help Build Our Nation.” The campaign aims to improve voluntary compliance while encouraging consumers to demand VAT receipts for their purchases.
The GRA is targeting a 30% reduction in the country’s VAT gap by 2028, as it moves to broaden the tax base and enhance domestic revenue mobilisation ahead of Ghana’s planned exit from the International Monetary Fund programme.
Transitional guidance for businesses
For businesses that fall below the new threshold but have not yet been formally deregistered, Dr. Naab advised that they must continue charging VAT at the standard rate of 20% until they receive official communication from the Commissioner-General.
“With the advent of this new Act, businesses can no longer charge the VAT flat rate. If the Commissioner-General has not deregistered you from the system, then you remain a VAT-registered person. In that case, you should continue charging VAT at the standard rate until you receive official communication from the Commissioner-General either to de-register you or to confirm your continued registration,” he explained.
The GRA maintains that these VAT reforms are part of a broader national effort to enhance revenue mobilisation, simplify compliance procedures, improve administrative efficiency, and ensure greater fairness and clarity within Ghana’s tax system.
