Ghana's Ministry of Finance has published the 2024 Budget Statement delivered in this country's Parliament. Tax measures announced as part of the budget include the following, as written below:.
Ghana's 2024 Budget: what businesses need to know about the VAT Changes
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Ghana
Author: Kristina Dosen
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Fiscal subject related
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Content accuracy validation date:
20.12.2023
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- Certified invoices will be required as the basis for all deductible expenses for income tax purposes.
- The second phase of the electronic invoicing system (e-VAT), covering six hundred large taxpayers and more than two thousand small and medium taxpayers, will be implemented.
- The implementation of upfront VAT on imports of VATable goods by unregistered importers will continue.
- A VAT flat rate of 5% will replace the 15% standard VAT rate on all commercial properties.
- Certain VAT exemptions will be reviewed to reduce distortions and abuses in the system.
- The VAT zero-rating on the supply of locally manufactured African prints and locally assembled vehicles will be extended for an additional two years.
- Environmental levies will be introduced on plastic packaging and industrial and vehicle emissions.
The VAT rate for smaller retail companies in Ghana is currently a flat rate of 4%, which includes 3% VAT and a 1% COVID-19 levy. This rate applies to the value of taxable supplies of goods by a retailer who makes between GHS 200,000 and GHS 500,000 in annual turnover. Otherwise, retailers who make more than GHS 500,000 in annual turnover are subject to the standard VAT rate of 15%.
The government intends to extend the VAT zero-rating provision for locally manufactured textiles and locally assembled vehicles until December 2025. This means that the retailers who sell these products will not charge VAT on them but will be able to claim input tax credits for the VAT they paid on their purchases.
Also, the government intends to reduce the rate of VAT and levies on locally manufactured sanitary pads from 15% to 0%. This means that the retailers who sell these products will also not charge VAT on them but will be able to claim input tax credits for the VAT they paid on their purchases.
Additionally, Ghana's government plans to expand the coverage of the VAT electronic invoicing system to cover a wider range of taxpayers. This means that more retailers will have to use the electronic invoicing system to issue invoices to their customers and report their sales data to the tax authorities.
Besides the mentioned plans, the government also proposes to expand the coverage of environmental excise duties to include plastic packaging and industrial and vehicle emissions. This means that retailers who use plastic packaging or operate vehicles for their businesses will have to pay additional taxes to the government.
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