Gov’t Begins Comprehensive VAT Reform to Boost Business Environment
The Government of Ghana has commenced a comprehensive review of the country’s Value Added Tax (VAT) regime in a bid to simplify the tax structure and enhance the overall business climate.
The reform process, which forms part of broader fiscal policy adjustments, was disclosed during a high-level meeting between Ghanaian officials and Wencai Zhang, Managing Director and Chief Administrative Officer of the World Bank Group.
Speaking at the meeting, Finance Minister, Dr Cassiel Ato Forson, underscored the government’s resolve to overhaul the current VAT system, describing it as complex and burdensome for businesses.
According to the Minister, a Technical Assistance Mission from the International Monetary Fund (IMF) is currently in the country working in collaboration with local authorities to support the review.
“We are fully aware of the challenges posed by the existing VAT structure,” stated Dr Forson. “That is why we are undertaking a complete overhaul of the system. I can assure our partners and the Ghanaian public that this reform process will be concluded before the main budget is presented in November.”
Ghana’s current effective VAT rate stands at 21.9%, one of the highest in Africa, a situation the Minister noted has led to widespread compliance difficulties and operational inefficiencies for businesses.
The VAT reform, government officials say, is aimed at improving tax compliance, increasing revenue mobilisation, and creating a more business-friendly tax environment that supports private sector growth.
The World Bank, for its part, lauded the reform initiative and reaffirmed its support for Ghana’s efforts in achieving a more equitable and efficient tax system.
The VAT overhaul forms part of broader tax and expenditure reforms being pursued by the government under its economic recovery programme, backed by a $3 billion IMF-supported arrangement.
