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Dangana

Concept

VAT and the levies at the tax point

How VAT, NHIL and GETFund are computed per line on a common base, why agency disbursements stay outside it, and where the rates live.

The rule

Under the Value Added Tax Act, 2025 (Act 1151), in force from 1 January 2026, VAT, the National Health Insurance Levy and the GETFund Levy are charged on the same base, and the COVID-19 Health Recovery Levy no longer applies. The system ships those rates with their effective dates, and the firm keeps them under Settings, Tax, so a change in the law is a change of setting, not of software.

How a document is computed

  • Tax is computed per line, each line rounded to the currency's smallest unit, and then summed. It is never computed on the total and spread back.
  • Agency disbursements, such as court filing fees paid on the client's behalf, sit outside the base.
  • The rates used are the ones in force on the document's tax point, so a credit note against a 2025 bill uses 2025's rules.

An example

Fees of GHS 10,000.00, photocopying of GHS 200.00 and a court filing fee of GHS 500.00 paid as agent:

LineAmountIn the base
Fees10,000.00Yes
Photocopying200.00Yes
Filing fee (agency)500.00No

With VAT at 15 per cent and each levy at 2.5 per cent, the tax on the base of 10,200.00 is 2,040.00, and the document totals 12,740.00.

The tax calculator computing a document at its tax point.
The tax calculator computing a document at its tax point.

A firm not registered for VAT

Under Settings, Tax registration, the firm records whether it is registered and from when. A firm that is not registered computes no tax and states that it is not VAT registered.

Withholding tax

The firm's withholding rules, by kind of payer and service, are kept beside the tax rates for the day payments arrive.

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