Ghana: The recent Tax Act amendment became effective.

The recent amendments to the tax regulations bring a series of changes to Ghana, particularly in the VAT rates affecting certain sectors. These adjustments aim to incentivize certain economic activities while ensuring that essential services remain accessible. Significant amendments include some changes in the area of indirect taxes, as explained below.

• Reducing the VAT rate applicable to commercial properties from 15% to 5%;
• Introducing a flat rate tax of 5% on the rental of commercial properties other than commercial rental establishments and the supply of immovable property by an estate developer;
• Extending the zero rate of locally manufactured textiles and vehicles to December 31, 2025;
• Introducing the zero-rate of locally manufactured sanitary towels;
• Waiving tax on electric vehicles for public transportation (such as buses);

Additionally, the Ministry of Finance has suspended the implementation of 15% VAT on residential electricity consumption when such consumption is above the maximum consumption level specified for block charges for lifeline units as of January 1, 2024. The suspension takes effect pending further engagements with key stakeholders (without a specific deadline so far).

The first schedule of the VAT Act 2013 (Act 870) exempts a supply of dwelling electricity up to the maximum consumption level specified for block charges of lifeline units from VAT. This means that any supply of electricity above the maximum level would generally not be exempt from VAT.