Ghana Parliament Passes VAT Bill Raising Exemption Threshold for Small Businesses

Ghana’s parliament has successfully approved the Value Added Tax (VAT) Bill 2025, which includes a critical measure to raise the revenue threshold at which companies must register and pay VAT, effectively exempting many small businesses from this tax obligation. This law, which still requires approval by head of state John Mahama, is a significant component of the government’s broader strategy to create a fairer tax system, simplify administration, and foster a tax environment conducive to economic growth. The chairman of the Finance Committee, Isaac Adongo, emphasized that the bill aims to reduce complexity, promote voluntary compliance, and ease the administrative burden currently placed on small and medium-sized enterprises (SMEs). The new legislation follows the earlier removal of other significant taxes, including the electronic levy (E-Levy) and the COVID tax, as the government seeks to alleviate financial pressures on households and businesses to combat unemployment. Recognizing that SMEs are a vital engine for economic growth and job creation—but often struggle with high taxes and obstacles to financing—the International Council for Small Business (ICSB) supports the move, noting that reducing the tax burden will strengthen the sustainability of these enterprises. The VAT Bill 2025 represents a dedicated effort to align Ghana’s tax regime with international best practices while providing much-needed relief and support to the country’s essential SME sector.