The 2025 VAT Act, and what it costs to get it wrong

Act 1151 did two things to an invoice. It put NHIL and GETFund inside the VAT base and made them recoverable, and it removed the COVID levy. The effective rate on a standard-rated supply is 20 per cent.

Take a net of GH₵ 1,000.00. Under the old cascade the levies were charged on the net at GH₵ 50.00 and could not be recovered, VAT was charged on the net plus the levies at GH₵ 157.50, and the customer paid GH₵ 1,207.50 — an effective 21.9 per cent. Under the Act the levies of GH₵ 50.00 sit inside the base and are recoverable, VAT is GH₵ 150.00 on the net, and the customer pays GH₵ 1,200.00.

The difference on one invoice is GH₵ 7.50. On a hundred invoices a month it is around GH₵ 9,000 a year of your customers’ money, plus the levy you have been treating as a cost rather than reclaiming.

There is a straightforward way to find out where your own system stands. Raise a standard-rated invoice for exactly GH₵ 1,000.00 net and read the total. If it says GH₵ 1,207.50, it has been overcharging since January.

A last word on certification. Calculating correctly under the Act and being certified as an invoicing system by the Revenue Authority are two different things, and any supplier who runs them together should be asked to show you the certificate.