Reduce VAT to 17.5% – Deloitte urges govt

Partner for Strategy and Partnerships at Deloitte Ghana, Yaw Appiah Lartey, is urging the government to further reduce the effective VAT rate to 17.5% during next year’s mid-year budget review.

He believes the reduction proposed in the 2026 Budget from 21.9% to 20% is not enough, arguing that the rate remains too high and could hurt the competitiveness of Ghanaian businesses.

Speaking to journalists at the Ghana National Chamber of Commerce and Industry’s 2026 Budget Review Seminar, Lartey said a deeper cut would greatly benefit the private sector.

He explained: “The government has made bold steps by removing some taxes in its first budget and scrapping the COVID levy. The VAT reforms were long overdue, and we welcome them”.

“However, a 20% VAT rate is still too high for businesses. We believe government should consider bringing it down to about 17.5% during the mid-year review, as this was the long-standing rate and aligns better with other Sub-Saharan African economies.”

During the 2026 Budget presentation, Finance Minister Dr. Cassiel Ato Forson announced the removal of the COVID-19 levy and major changes to VAT.

These include reducing the effective VAT rate to 20%, increasing the VAT registration threshold from GH₵200,000 to GH₵750,000, and extending VAT zero-rating on locally manufactured textiles until 2028.

Dr. Ato Forson said eliminating the COVID levy alone would return GH₵3.7 billion to individuals and businesses, while the full VAT reforms are expected to provide nearly GH₵6 billion in relief.

He expressed confidence that these measures will boost economic activity, support private sector growth, and ease the financial pressure on Ghanaians.