Know The Abolished Taxes in Ghana

Ghana’s Parliament has abolished several tax laws since 2024, a decision taken to enhance the tax system, lessen tax burdens on taxpayers, and promote economic growth. This move is part of the government’s RESET Agenda, aimed at reducing the tax burden on citizens and residents.

Some of the notable taxes abolished include the COVID-19 Health Recovery Levy, VAT Flat Rate, Electronic Transfer Levy (E-Levy), Emissions Levy, VAT on Insurance, Betting Tax, and Withholding Tax on Lottery Winnings. The abolition of these taxes is expected to simplify the tax administration system, improve compliance, promote economic growth, and enhance competitiveness.

The COVID-19 Health Recovery Levy, for instance, was abolished to reduce the financial burden on individuals and businesses, as COVID-19 is no longer considered a public health emergency. This move is expected to return about GH¢3.7 billion to individuals and businesses in 2026 alone. The abolition of the E-Levy is expected to revive digital financial services, benefiting small businesses and individuals who rely on mobile payments.

The Value Added Tax Act, 2025 (Act 1151), has introduced reforms, including a Unified VAT Rate of 15% on all taxable supplies, and an increased VAT registration threshold from GH¢200,000 to GH¢750,000, aimed at benefiting micro and small enterprises. The GETFund Levy and NHIL are now deductible as input VAT, reducing the cost of doing business, particularly for small businesses.

Taxation is crucial for Ghana’s economy, providing essential services and infrastructure. However, tax compliance remains a challenge, with only about 29% of eligible taxpayers paying VAT, and 19% paying Income Tax. To address this, promoting citizens’ and residents’ participation in national development through taxation is essential.

Taxes are the primary source of revenue for the government, accounting for over 60% of total revenue. These funds provide healthcare, education, infrastructure, and security for citizens, businesses, and residents. By paying taxes, citizens contribute to national development.

Key benefits of increased tax participation include improved revenue mobilization, enhanced economic stability and growth, better public services, and reduced tax burden on compliant taxpayers. However, challenges persist, including limited awareness of tax obligations, limited access to tax services, perceived corruption, and mismanagement of funds.

In conclusion, promoting tax participation requires a multifaceted approach. The Ghana Revenue Authority and stakeholders must address compliance challenges, simplify tax processes, and increase transparency to encourage Ghanaians to contribute to national development. Citizens must recognize the importance of taxation and take ownership of their role in shaping Ghana’s future.

As a taxpayer, double-check invoices when making purchases to avoid being charged taxes no longer recognized by law. Government has abolished key taxes; business owners should avoid charging these taxes to avoid illegitimacy. Citizens and residents are encouraged to pay their taxes and contribute to national development.

Join the train and let’s build the Ghana we want together. #Know your taxes, pay your taxes, and let’s build Ghana together.

By Elsie Appau-Klu ESQ (Lawyer and Policy Analyst) 

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