Two months after Ghana’s revised Value Added Tax (VAT) regime took effect, many consumers are yet to benefit from the promised tax relief as businesses continue charging abolished levies and displaying incorrect rates on invoices, a Daily Graphic investigation has revealed.
The landmark reform, which came into force on January 1, 2026, abolished the 1% COVID-19 levy and consolidated various charges to reduce the effective VAT rate from 21.9% to 20%. The government estimated the change would free approximately GH¢5.7 billion in disposable income for consumers.
However, a seven-week monitoring exercise conducted by the Daily Graphic across the Greater Accra Region between January 12 and February 28 found widespread non-compliance and confusion among businesses.
Businesses Struggle to Recalibrate
Shopping malls, supermarkets, and eateries have largely failed to recalibrate their receipting systems to reflect the new tax structure. The team observed that many invoices still prominently featured the abolished COVID-19 levy, while others displayed multiple VAT charges—including 0%, 3%, and 15% rates—on receipts from different shops.
Even where businesses had removed the COVID-19 levy from invoices, consumers reported no corresponding reduction in final prices, effectively nullifying the intended relief.
Some businesses claimed they were not given adequate transition time to update their systems, with the law passed in December 2025 and taking effect just weeks later on January 1, 2026.
GRA: Unlawful Charges Must Stop
The Ghana Revenue Authority (GRA) has warned that continuing to charge abolished levies is unlawful and has urged consumers to insist on paying only the correct 20% VAT.
Rev. John Buabeng, Head of Enforcement and Debt Management at GRA’s Accra South Area Office, emphasised that the COVID-19 levy “ceased to exist” once the President assented to the new law.
“Even if their software installation was done externally and requires adjustments, customers must be refunded at the point of sale because the law no longer authorises the levy,” Rev. Buabeng stated.
He clarified that the flat rate scheme and 3% VAT have also been abolished, warning that businesses operating under the old system are acting unlawfully. He encouraged consumers to demand VAT invoices and report non-compliant businesses.
Refunds Available for Consumers
In a significant move, the GRA announced that consumers who have already paid the abolished levy can seek refunds.
“With a valid receipt, consumers who have already paid the levy can walk into any GRA office and apply for a refund. Auditors will verify whether the amount was remitted to the state, and the necessary steps will be taken,” Rev. Buabeng explained.
Experts Weigh In
Tax experts have confirmed the illegality of continuing to charge abolished levies but cautioned that consumers should not automatically expect price reductions.
Abeku Gyan-Quansah, Senior Tax Partner at PwC, stated unequivocally that once Parliament repeals a tax law and the President assents, it “ceases to have effect.”
However, he noted that pricing involves multiple factors beyond tax components. “Price determination was not always purely cost-based. So many things went into pricing,” he explained, adding that some businesses may genuinely be struggling with system updates rather than acting in bad faith.
Albert Kungmaa Ziem, a tax practitioner and lawyer, attributed the low compliance to the short transition period, particularly for small and medium enterprises. He called on the GRA to intensify business-to-business education campaigns before enforcing penalties.
Consumer Rights Perspective
Appiah Kusi Adomako, Director of CUTS International West Africa Centre, argued strongly that consumers should benefit from at least a 1.9% price reduction.
“The taxes that were taken off were supposed to go back to the consumer’s pocket,” he said.
He accused some firms of adjusting base prices upward to maintain previous totals, describing the practice as “more of a dishonest approach” rather than outright criminality.
Background
The VAT reforms were announced in the 2025 Budget Statement and anchored in the Value Added Tax Act, 2025 (Act 1151) and the COVID-19 Health Recovery Levy Repeal Act, 2025. The new regime aims to eliminate cascading taxes, simplify calculations, and modernise tax administration while increasing the registration threshold and abolishing the VAT Flat Rate Scheme.
The GRA has pledged to continue nationwide educational campaigns while urging consumers to play their part by demanding proper invoices and insisting on the correct 20% rate.
