• Bill aims to simplify tax system, promote compliance, and support growth
  
  
• Follows removal of E-Levy, COVID tax to ease household, business costs
  

Ghana's parliament has approved the Value Added Tax Bill 2025, which includes a measure to raise the revenue threshold at which a company must pay VAT. The law, which also requires approval by head of state John Mahama, would exempt many small businesses from the tax obligation.

The information was reported on Friday by the Ghana News Agency, which cited the chairman of the Finance Committee, Isaac Adongo. According to the chairman, the bill aims to create a fairer tax system, reduce the complexity of tax administration, promote voluntary compliance with tax obligations and foster a tax environment conducive to growth. It is also expected to ease the administrative burden on small businesses and align Ghana's VAT regime with international best practices.

In March, Ghana's parliament approved the removal of several taxes in the 2025 Finance Bill, including those on gambling. The new law comes as the government seeks to combat unemployment, in part by removing certain taxes, including the electronic levy (E-Levy) and the COVID tax, to ease the burden on households.

According to the International Council for Small Business (ICSB), small and medium-sized enterprises (SMEs) in Ghana play an important role in the country's economic growth, notably contributing to job creation. However, they face several challenges such as high taxes, informal competition and obstacles to accessing bank financing. The ICSB states that reducing the tax burden on SMEs would help alleviate their costs and strengthen their sustainability.

Lydie Mobio