New Ghana Vat Act Promulgated

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As a result, the Value Added Tax Act, 1998 (Act 546) as amended, has been repealed and replaced by the Value Added Tax Act, 2013, (Act 870) (the new VAT Act).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%.