Ghana Begins Major VAT System Overhaul to Boost Business Environment

Ghana has launched a comprehensive review of its Value Added Tax (VAT) system, marking a significant step toward simplifying tax compliance and improving the country’s business climate.

High-Level Discussions with World Bank

The initiative was confirmed during a meeting between Ghanaian officials and Wencai Zhang, Managing Director of the World Bank Group. Finance Minister Dr. Cassiel Ato Forson emphasized Ghana’s commitment to VAT reform through international partnerships.

IMF Technical Team Supports VAT Review

Dr. Forson revealed that an IMF Technical Assistance Mission is currently working with Ghanaian authorities on the VAT review process. The minister acknowledged the challenges posed by Ghana’s current 21.9% VAT rate – among Africa’s highest – which has created compliance burdens for businesses.

“We are fully aware of the challenges posed by the existing VAT structure,” stated Dr. Forson. “That is why we are undertaking a complete overhaul of the system. I can assure our partners and the Ghanaian public that this reform process will be concluded before the main budget is presented in November.”

Expected Benefits of VAT Reform

The VAT review aims to:

• Improve tax compliance rates
• Enhance revenue collection efficiency
• Create a more business-friendly tax environment

The World Bank has expressed strong support for Ghana’s reform efforts, reaffirming its commitment to help establish a more efficient and equitable tax system.