The Parliament of Ghana has enacted the following laws:

• The Value Added Tax (Amendment) Act, 2018, Act 970
• The National Health Insurance (Amendment) Act, 2018, Act 971
• The Ghana Education Trust Fund (Amendment) Act, 2018, Act 972

The Acts were assented to by the President on 31 July 2018 and gazetted on 1 August 2018. Consequently, the Acts came into force on 1 August 2018.

This Alert outlines the key provisions of these laws.

The Value Added Tax (Amendment) Act, 2018, Act 970

The Act revises the current Value Added Tax (VAT) rate from 15% inclusive of GETFund (see below – Ghana Education Trust Fund) to a GETFund – exclusive rate of 12.5%. Standard rated taxable supplies will therefore be subject to output and input VAT at 12.5%.

The National Health Insurance (Amendment) Act, 2018, Act 971

The Act seeks to separate the National Health Insurance Levy (NHIL) from the VAT. The purpose of enacting the Act is to convert the NHIL into a levy which is not subject to the input-output method of computation for VAT.

According to the Act, goods on which the VAT flat rate is imposed are not subject to the Levy. The Act also provides that the Revenue Administration Act, 2016, Act 915 applies to the administration of the Levy and the Ghana Revenue Authority is responsible for the collection of the Levy.

The National Health Insurance (Amendment) Act, 2015 (Act 888) has been repealed.

The Ghana Education Trust Fund (Amendment) (GETFund) Act, 2018, Act

The Act converts the 2.5% GETFund portion of the current VAT rate into a levy that will not be subject to input tax deductions.

The Act provides that the Levy is applicable on:

• The supply of goods and services made in the country other than exempt goods and services
• The import of goods or services other than exempt imports

According to the Act, the Levy is not be applicable to exempt individuals and organizations and goods that are subject to the VAT flat rate.

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CONTACTS

For additional information with respect to this Alert, please contact the following:

Ernst & Young Advisory Services Limited, Accra

• Robin McCone
  robin.mccone@gh.ey.com
• Isaac Sarpong
  isaac.sarpong@gh.ey.com

Ernst & Young Advisory Services (Pty) Ltd., Africa ITS Leader, Johannesburg

• Marius Leivestad
  marius.leivestad@za.ey.com

Ernst & Young LLP (United Kingdom), Pan African Tax Desk, London

• Rendani Neluvhalani
  rendani.mabel.neluvhalani@uk.ey.com
• Byron Thomas
  bthomas4@uk.ey.com

Ernst & Young LLP, Pan African Tax Desk, New York

• Silke Mattern
  silke.mattern@ey.com
• Dele A. Olaogun
  dele.olaogun@ey.com

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ATTACHMENT

PDF version of this Tax Alert