The use of the Tax Calculators only serves as a guideline. The actual tax payable by you or deduction available to you (if any) will depend on your personal circumstances. It is advised that for filing of returns and for making formal financial decisions, the exact calculation be made as per the provisions contained in the relevant Acts, and Laws.
About VAT in Ghana
The Value Added Tax (VAT) is a tax imposed on the value added to goods and services at each stage of their production and distribution. It is an integral part of the final price paid by consumers for these goods or services. In certain countries, it may be referred to as the Goods and Services Tax (GST).
Parliament has recently passed the Value Added Tax (Amendment) No. 2 Act, 2022 (Act 1087), which has resulted in an increase in the VAT rate from 12.5% to 15%. Alongside this change, there are additional levies that are calculated based on the chargeable amounts: the National Health Insurance Levy (NHIL), the Ghana Education Trust Fund Levy (GETFund Levy), and the Covid-19 Health Recovery Levy (COVID-19 HRL). It's important to note that these levies cannot be deducted as input VAT. These adjustments have implications for the tax computation of individuals and businesses registered for VAT.
Under the COVID-19 Health Recovery Levy Act, 2021 (Act 1068), a special levy has been imposed on the supply and import of goods and services in Ghana. This levy is specifically designed to aid in the recovery from the effects of the COVID-19 pandemic.
The levy is chargeable at a rate of 1% calculated on the value of taxable supply.
COVID-19 Health Recovery Levy (COVID-19 HRL)
Introducing the COVID-19 Health Recovery Levy Act, 2021 (Act 1068), which establishes a unique levy on the provision and importation of goods and services in Ghana.
Under this act, a 1% levy is imposed based on the value of taxable supply for the following:
- Goods and services supplied within Ghana, excluding those that are exempt.
- Goods and services imported into Ghana.
The COVID-19 Health Recovery Levy applies to both Standard Rate and VAT Flat Rate registered individuals or entities.
It's important to note that the COVID-19 Health Recovery Levy does not allow for input tax deduction. Nevertheless, it is a permissible deduction when calculating profit.