The Ghana Revenue Authority (GRA) has set an ambitious revenue target of GH₵225 billion for the 2026 fiscal year, signalling renewed confidence in the country’s domestic revenue mobilisation drive.
The projection follows the implementation of sweeping reforms to the Value Added Tax (VAT) system, which the Authority believes will broaden the tax base, improve compliance and enhance overall efficiency in revenue collection.
According to the GRA, the reforms are not merely about increasing tax rates but rather about restructuring the VAT framework to make it fairer, more transparent, and growth-oriented. The Authority insists that with the right enforcement mechanisms and taxpayer education, the revised VAT regime will play a pivotal role in achieving the projected revenue figure.
Major Changes to VAT Registration Threshold
One of the most significant changes under the new VAT regime is the upward review of the registration threshold for businesses dealing in goods. Under the revised rules, businesses are now required to register for VAT only after reaching an annual turnover of GH₵750,000, a sharp increase from the previous threshold of GH₵200,000.
The GRA explains that the adjustment is intended to ease the compliance burden on small businesses while allowing the Authority to focus its resources on monitoring medium and large enterprises with higher revenue potential. By reducing the number of very small traders within the VAT net, the GRA expects to improve efficiency and reduce administrative bottlenecks that have historically affected tax administration.
End of the VAT Flat Rate Scheme
Another major reform is the elimination of the VAT Flat Rate Scheme. The scheme, which applied mainly to retailers and wholesalers, has long been criticised for creating distortions within the VAT system and limiting revenue inflows.
With its removal, the GRA believes the VAT system will become more uniform and transparent. Businesses will now account for VAT under a standard structure, which the Authority says will reduce leakages and make it easier to track transactions across the supply chain.
The reforms also introduce the allowance of input tax credits on the National Health Insurance Levy and the Ghana Education Trust Fund levy. This change is expected to reduce the tax burden on businesses by allowing them to offset certain costs incurred in the course of operations.
In addition, the effective VAT rate has been reduced to 20 percent. The GRA argues that a lower effective rate, combined with improved compliance, will encourage voluntary tax payment and discourage underreporting. The Authority believes that a more business friendly VAT structure will ultimately lead to higher overall revenue rather than losses.
Commitment to Domestic Revenue Mobilisation
Addressing journalists after appearing before Parliament’s Public Accounts Committee on Monday, January 12, GRA Commissioner General Anthony Sarpong reaffirmed the Authority’s commitment to achieving the GH₵225 billion target. He stressed that domestic revenue mobilisation remains the backbone of Ghana’s development agenda.
“We have projected GH₵225 billion for 2026. At GRA, this is our core responsibility. From the start of the year, we are actively working to ensure effective revenue mobilisation. Revenue collection is the lifeblood of national development, and without it, the President’s vision for the country cannot be realized.”
Anthony Sarpong, Commissioner-General fo the GRA
Mr Sarpong noted that beyond policy reforms, the GRA is strengthening enforcement, investing in technology and intensifying public education to improve tax compliance across all sectors of the economy.
Implications for Businesses and the Economy
For businesses, the VAT reforms present both opportunities and responsibilities. While higher registration thresholds and input tax credits offer relief, stricter enforcement and the removal of simplified schemes mean that accurate record keeping will become even more critical.
Economists argue that if properly implemented, the reforms could enhance revenue predictability and reduce Ghana’s reliance on borrowing. Increased domestic revenue would also provide government with more fiscal space to invest in infrastructure, social services and economic recovery initiatives.
The success of the GH₵225 billion revenue target will largely depend on effective implementation, cooperation from taxpayers and sustained political commitment. As the VAT reforms take effect, all eyes will be on the GRA to see whether the ambitious projection can be translated into actual collections.
The Authority remains optimistic that the combination of policy reform, compliance enforcement and stakeholder engagement will deliver the anticipated revenue windfall and support Ghana’s long term development goals.
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