Ghana VAT rate increase Jan-2014

Ghana VAT rate increase
Ghana increased their VAT rate in January 2014, the standard rate which was 12.5%, moved to 15%, while the National Health Insurance Levy (NHIL) remains at 2.5%. This brings the total VAT on most goods to 17.5%. This was implemented as the government felt that the existing taxes government were collecting was nowhere near what they need as a country to build infrastructure and the economy.

What is the National Health Insurance Levy (NHIL)?
The National Health Insurance Levy (NHIL) is a levy on goods and services supplied in or imported into Ghana. All goods and services are subject to the levy unless they are exempt. The Levy is charged at a rate of 2.5% on the VAT-exclusive selling price of the goods supplied or services rendered.

1. VAT Rate
All persons registered for the Value Added Tax (VAT) and are currently operating the standard rate scheme are required to charge and account for VAT and the National Health Insurance Levy (NHIL) simultaneously at the rates of 15% and 2.5% respectively of the taxable value of their supplies. This in effect amounts to a total charge of 17.5% of the taxable value of the supply.

2. VAT/NHIL Invoices
The Commissioner-General’s VAT/NHIL invoices must be issued for all taxable supplies with the rate for VAT manually adjusted to indicate 15% instead of 12.5%. The rate of the NHIL remains 2.5%.
Taxpayers who have been authorised by the Commissioner-General to use their own computer-generated invoices as well as those authorised to use electronic cash registers are required to re-programme their equipment to ensure that VAT is charged at the rate of 15% and NHIL at 2.5% and their customers invoiced accordingly. Such registered persons must use the Commissioner-General’s VAT/NHIL invoices adjusted as indicated in any instance where they are unable to use their computer-generated invoices or electronic cash register receipts.