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VAT Law In Ghana

The rate of the tax is twelve and half-percent of the value of the taxable supply of goods and services or on the value of the import.

A taxable person who is a retailer or wholesaler of goods shall account for VAT at a flat rate of percent.

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The controversial Valued Added Tax (VAT) law 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.

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As a result of this, the Valued Added Tax Act,1998(Act 546) as amended, has been repealed and replaced by the Valued Added Tax Act, 2013, (Act 870), which was the new Act at that time.

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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 relevant amendments is the increase in standard VAT rate from 12.5% to 15%. The National Health Insurance Scheme Levy(NHIL) charged on goods and services supplied in or imported into Ghana and collected with VAT remains at 2.5%.

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As a result of this, the standard VAT and NHIL rate on the taxable supply of goods and services is increased from 15% to 17.5%.

Per offìcial guidelines on the application of the new VAT Act issued by the Ghana Revenue Authority (GRA), the VAT rate on GRA VAT/NHIL invoices issued in respect of taxable supplies is to be manually adjusted from 12.5% to 15%.

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Taxpayers who have been authorized by the Ghana Revenue Authority to use their own computer-generated invoices or electronic cash registers and required to re-programme their equipment to ensure that VAT is charged at the rate of 15%.

Where these taxpayers are unable to use such computer-generated invoices or electronic cash receipts, they must the manually adjusted VAT invoices as set out above.

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