Executive summary

On 29 January 2026, the Court of Appeal of Ghana delivered its judgment in Republic v. Commissioner-General, Ghana Revenue Authority, Ex Parte application at the High Court in the first instance, reversing the High Court's decision below and holding that corporate income tax (CIT) refunds are governed by the Revenue Administration Act, 2016 (as amended) (RAA) not the Value Added Tax Act, 2013, Act 870 (VAT Act) (now repealed), and that taxpayers are entitled to refunds for VAT overpayments under Sections 50(3) to (9) of the VAT Act, even if they do not qualify as exporters.

The appeal concerned the proper statutory treatment of refunds for excess VAT and CIT that the Appellant had paid between the 2015 and 2019 Years of Assessments (YoAs). The Appellant sought a refund of the overpaid taxes based on Section 68(1) of the RAA. However, the Commissioner General (CG) neither responded to the refund request nor provided a reason for declining to grant the refund, despite the Appellant's sending a reminder requesting a response. Urging the CG to act on the refund request, the Appellant filed an application in the High Court for an order of mandamus to compel the CG to act.

Opposing the application, the CG contended that Sections 50(1) and (2) of the VAT Act applied to VAT refunds, but Section 68 of the RAA did not. The CG therefore argued that the Appellant was not entitled to a refund but could carry forward the excess credit, because it did not constitute overpayment of tax. The High Court upheld the CG's position, stating that the specific provisions of the VAT Act took precedence over the general rules in the RAA, thereby denying the application for an order of mandamus.

On appeal, the Court of Appeal held that although Sections 50(1) and (2) of the VAT Act set forth refund criteria for exporters, Sections 50(3) to (9) provide an avenue for refunds in other circumstances, which applied in the Appellant's case. The Court found no conflict between RAA Section 68 and Sections 50(3) to (9) of the VAT Act, concluding that the two provisions should be interpreted together. The Court specified that RAA Section 68 applies to income tax overpayments, but Section 50 of the VAT Act does not. Additionally, the Court of Appeal held that the Appellant properly invoked the High Court's jurisdiction to grant the order of mandamus in favor of the Appellant because all necessary elements required for such an application had been satisfied. Specifically, the Court of Appeal found that:

1. The Respondent had a public duty to honor legitimate tax refund requests under Section 50 of the VAT Act and Section 68 of the RAA.
2. The Appellant had the right to enforce the performance of the Respondent's duty to refund overpaid taxes.
3. The Appellant's submission of tax refund applications under RAA Section 68 constituted a demand for the Respondent to refund the overpaid taxes.
4. The Respondent had refused to perform his public duty, imposed under the VAT Act and RAA, to honor tax refund requests in a timely manner.

Flowing from the above, the appeal was allowed in its entirety, compelling the CG to fulfill the refund obligation under the law.

The Court of Appeal's decision provides clarity to taxpayers who have overpaid VAT, allowing them to apply for refunds under Sections 50(3) to (9) of the VAT Act. Arguably, a similar dispensation should also be permissible for taxpayers under the new Value Added Tax Act, 2025 (Act 1151) for VAT credits for periods from January 2026. This should be true even if a taxpayer does not meet the criteria for a refund opportunity for exporters under Section 50(1) of the VAT Act, now covered under section 53(1) of Act 1151.

It should be noted that, even though "VAT credit" and "tax credit" are not defined in the VAT Act or the RAA, ordinary meaning can be applied to interpret the terms in the statutes. Black's Law Dictionary, 10th Edition, defines tax credit at page 1689 as "an amount subtracted directly from one's tax liability … as opposed to a deduction from gross income." As a result, if input VAT (representing tax paid or payable on taxable purchases) is subtracted directly from output VAT (reflecting tax charged on taxable supplies payable to the Ghana Revenue Authority (GRA)), the net effect constitutes either an overpayment of tax or a tax liability due the GRA. Therefore, an argument that a VAT credit does not automatically constitute an overpayment of tax for which a refund opportunity should be available to taxpayers does not comport with the law. This aligns with the concurring persuasive opinion of the Court of Appeal in which it established the principle that where a taxable person incurs more input VAT than it charged and remits the excess input VAT to the CG, the excess input VAT constitutes an overpayment of tax and creates a right in the taxable person.

Further, if the CG fails to act or give any response to the taxpayer, the taxpayer has the right to apply to the High Court for an order of mandamus to compel the CG to fulfill his statutory obligation to honor refunds of excess credits. If the CG does not respond to a refund application following a tax audit, taxpayers may consider an alternative remedy — appealing to the Independent Tax Appeals Board (ITAB). This option should be assessed on case-by-case basis to determine the most efficient value proposition for a taxpayer.

The Court of Appeal's decision is very significant to the VAT landscape in Ghana as it has altered the High Court's previous interpretation of the VAT Act, which substantively restricted tax refunds for businesses in operation to only exporters. This restriction caused some taxpayers with VAT credits that are not engaged in exports, to end up with significant tax credits with no opportunity to recover them if they did not generate substantial output VAT and continued to claim VAT input over time. This decision resolves the challenge faced by these taxpayers.

The decision of the Court of Appeal is subject to appeal to the Supreme Court of Ghana. Nonetheless, taxpayers should consider urgently assessing their VAT position arising from the decision, as the VAT-refund opportunity is subject to the statute of limitations. This is especially important because an appeal process may take three years or more, by which time some refundable VAT credit(s) could be time-barred.

Background

The Appellant is a company that is engaged in the construction of commercial warehouses for rental purposes. The CG of the GRA, the Respondent, is authorized by law to run the day-to-day affairs of the GRA. This case traces its origin to 2021 when the CG refused to grant a refund totaling 12,398,000 Ghanaian Cedi (GHS) (comprised of GHS200,112 in CIT and GHS12,197,888 in VAT), which the CG determined to be excess credit for the Appellant between 2015 to 2019 YoAs following a tax audit.

The Appellant's refund application was based on Section 68 of the RAA. The Respondent did not respond to the Appellant's request for refund nor give any reason to the Appellant for this refusal.

Consequently, the Appellant invoked the High Court's supervisory jurisdiction under Article 141 of the 1992 Constitution of the Republic of Ghana and Section 16 of the Courts Act, 1993, Act 459, seeking an order of mandamus to compel the Respondent to refund the total excess tax paid. The Appellant argued that, applying the leges posteriores priores contrarias abrogant rule (i.e., the provisions of a later law take precedence over those of an earlier law if there is a conflict between the two laws) to interpretation, Sections 50(1) and (2) of the VAT Act (related to refunds of excess VAT) had indirectly been repealed by the express language of later-enacted RAA Section 68. Therefore, the Appellant asserted that although refunds of excess VAT credits under Section 50(1) and (2) of the VAT Act are limited to persons engaged in export, it was entitled to refund under RAA Section 68.

The Respondent argued that Sections 50(1) and (2) of the VAT Act were specific provisions that applied to refunds of excess tax paid under the VAT Act, and that the proper rule to apply is generalia specialibus non derogant (i.e., if there is a conflict between two laws or provisions, the specific rule takes precedence over the general rule). The CG argued that, because only exporters are entitled to a refund under Section 50(1)(b) of the VAT Act, this provision conflicted with Section 68 of the RAA. Therefore, the CG did not grant the refund sought by the Appellant but held the tax overpayment in the Appellant's credit to be carried forward in accordance with Section 50(1)(a) of the VAT Act.

The High Court delivered its decision (SUIT No H1/21/2024) on 17 July 2021, upholding the CG's position that matters of VAT refunds were specifically provided for under Section 50 of the VAT Act. The court determined that in cases of conflict between RAA Section 68 and Section 50 of the VAT Act regarding VAT refund issues, the VAT Act prevailed. It found that Sections 50(1) and (2) of the VAT Act entitled only exporters who met certain criteria to a refund of excess VAT paid, and the Appellant did not qualify. Consequently, the High Court held that an order of mandamus did not lie, as the CG had discharged his duty by allowing the Appellant to carry forward its VAT credit.

Court of Appeal's judgment

Issue 1: Whether the trial judge erred in applying the VAT Act in dealing with the claim which law was applicable for purposes of claiming of a refund of overpaid CIT

The court held that, in the case of CIT refunds, the applicable law was the RAA (the general law on refunds), not the VAT Act. The court emphasized that the VAT Act was a law primarily to regulate VAT, but not any other tax. Thus, it was erroneous for the High Court to treat the CIT overpayment of GHS200,112 as excess VAT paid and apply the VAT Act to it. Instead, the applicable law was Section 68 of the RAA. Accordingly, the Court of Appeal reversed the High Court's decision on that matter.

Issue 2: Whether the trial judge erred in treating VAT overpayment under Section 50(1) instead of Section 50(3) to (9) of VAT Act or under Section 68 of the RAA

The court rejected the argument of conflict between Section 50 of the VAT Act and Section 68 of the RAA. It found that while the VAT Act governs the specific procedure and mechanics for VAT refunds, the RAA provides the general administrative framework and applies to refunds of non-VAT taxes such as CIT, Pay-As-You-Earn and withholding tax. The court further said that the applicable provisions in the VAT Act and RAA are in pari materia (i.e., on the same subject) with each other. Therefore, they must be read in harmony to give effect to the intention of the law maker.

Further, the court rejected the Respondent's position that VAT refunds were available only to exporters. It held that section 50(1)(b) of the VAT Act creates a specific and limited refund route for exporters, in which excess input VAT arises from exports exceeding 25% of total supplies and export proceeds have been repatriated to Ghana. However, this provision does not cover the full scope of VAT refund entitlement under the VAT Act. Therefore, limiting VAT refunds to exporters was unwarranted.

The court clarified that Sections 50(3) to (9) of the VAT Act establish an alternative refund regime covering all other VAT credits, which applies to non-exporters. Thus, any taxpayer who had paid VAT in excess of what is lawfully chargeable was entitled to a refund.

From the foregoing, the court identified two distinct statutory pathways for VAT refunds:

• Category 1: Export-related excess input VAT is governed by Sections 50(1) and (2).
• Category 2: All other VAT overpayments are governed by Sections 50(3) to (9).

The court therefore held that although the Appellant was not entitled to a refund of excess VAT paid under Sections 50(1) and (2), it was entitled to a refund under Sections 50(3) to (9) of the VAT Act.

Issue 3: Whether an order of mandamus would lie if the CG does not honor a request for a refund of overpaid taxes in a timely manner without legal justification.

The court held that an order of mandamus will lie if the CG fails, without lawful justification, to refund excess taxes within the time prescribed by statute. It found that Section 50(5) of the VAT Act and Section 68(1) of the RAA impose a clear statutory duty on the CG to refund excess tax paid within 30 days and 90 days for VAT and CIT, respectively. That duty is public in nature, given that the CG performs statutory tax administration functions. The taxpayer correspondingly has a legal right to enforce compliance with that duty. Therefore, if the taxpayer makes a demand for refund and the CG fails to act in a timely manner on the demand, an order of mandamus will lie.

The court held that in the case at hand, the conditions precedent for mandamus were satisfied: a formal demand had been made, and there was a refusal or failure to perform the statutory obligation. The Respondent's purported compliance — by crediting the amount instead of effecting a refund — did not amount to lawful performance of the duty and was found to be an attempt to circumvent the statutory requirement.

Accordingly, the application for mandamus was successful.

Implications

The Court of Appeal's decision has various implications for taxpayers, including multinational enterprises (MNEs). Generally, CIT overpayments should be refunded under the RAA, while VAT overpayments should be refunded under the VAT Act.

Export businesses that overpay VAT arising specifically from excess input tax attributable to exports may apply for a refund, provided they satisfy the statutory conditions, including the requirement that the exports constitute at least 25% of total supplies and that all export proceeds are fully repatriated. Taxpayers that are not exporters may seek VAT refunds for excess VAT credits.

Companies may compel the CG to refund qualifying overpayments through mandamus if the CG delays in acting timely.

The opportunity to receive a VAT refund can help MNEs manage cash positions of their businesses. Qualifying MNEs must assess their positions to prevent refundable credits from being time-barred for failure to make a timely refund application.