Indirect Tax Alert

25 June 2015

Ghana amends Value Added Tax

The Ghana Parliament recently approved a number of amendments to the Value
Added Tax (VAT) Act,2013 (Act870) with the passage of the Value Added Tax
(Amendment) Act,2015 (Act890). The President has assented to the new Act
andit was published in the Official Gazette.
Key changes to the new VAT Act include:
Requirement for estate developers to account for VAT at a flat rate of 5% on
supplies made in respect of an immovable property. This shall be calculated on
thevalue of the taxable supply. Estate developers are not entitled to deduct input
tax in connection with the supply of immovable property.
Introduction of the Ghana Revenue Authority (GRA) General Refund Account to
replace the Value Added Tax Refund Account. This is aimed at establishing a more
efficient refund system to cover duty drawbacks, VAT refunds and corporate tax
overpayments. An amount not exceeding 4% of total revenue collected shall be
paid into the General Refund Account.
Repeal of subsection(7) of section 159 of the Internal Revenue Act,2000, Act592
(as amended) to conform to the GRA General Refund Account.
Interpretation of a currency point has been corrected from GH10,000 to GH1.
Defining pharmaceuticals to mean essential drugs listed under the Harmonised
Systems Commodities Classification Code,2012.
The following additions have also been made to exempt supplies:
Supply of pharmaceuticals in Ghana
Supply or import of the active ingredients and selected inputs for the manufacture
of pharmaceuticals as determined and prescribed by the Minister of Health and
the VAT Regulations
Import of selected drugs or pharmaceuticals as determined and prescribed by
the Minister of Health and the VAT Regulations
Supply of paper for the production of exercise books and textbooks.
Import of mild carbon steel for the manufacture of machetes
The above amendments are now in effect.
 For additional information with respect to this Alert, please contact the following:

Ernst & Young Ghana, Accra

Wilfred Okine +233 302 774 9868 wilfred.okine@gh.ey.com

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

Folkert Gaarlandt +27 11 772 5220 folkert.gaarlandt@za.ey.com

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Indirect Tax

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