TaxLawGHby MSL Business School
MSL Business SchoolGhana retail VAT authority guide
Ghana Retail VAT Scheme
The definitive guide to eligibility, written approval, daily gross takings, the three retail calculations, sales receipts, input tax, annual adjustments and records.
Published and prepared by MSL Business School through TaxLawGH, its tax and fiscal policy education platform.
MSL Business School Retail VAT Scheme at a glance
MSL Business School technical position
The Retail VAT Scheme changes how an approved retailer calculates output tax from tax-inclusive retail takings.
It is not a reduced VAT rate. It is an authorised accounting method for a taxable person that retails taxable goods. The retailer records daily gross takings, identifies or estimates the positive-rated portion and extracts the current VAT, NHIL and GETFund levy from that portion.
The former 3% VAT Flat Rate Scheme for goods and 5% scheme for immovable property are not part of the 2026 regime. A retailer must not use the Retail VAT Scheme without the Commissioner-General's written approval.
Eligibility and scope
The statutory applicant is a taxable person that retails taxable goods.
A taxable person is a person registered or required to register under Act 1151. The retail scheme does not replace VAT registration.
The scheme applies to retail sales of goods. It does not convert a service business into a retail-scheme business.
Where a business makes retail and non-retail supplies, only the qualifying retail activity falls within the approved scheme.
Hotel accommodation, restaurant meals, catering and other service supplies follow the ordinary VAT accounting and invoicing rules.
Supplies to VAT-registered business customers are accounted for under the normal method with the required tax invoice.
A mixed business must separate its approved retail activity from services and other supplies accounted for normally.
Approval is transaction-specific in operation: an approved retailer cannot put every receipt of the business into the retail calculation. Classify retail goods, non-retail sales, services, exempt supplies and zero-rated supplies before calculating tax.
MSL Business School authorisation test
Written approval comes before the first retail-scheme calculation.
- 01Confirm VAT status and retail activity
Establish that the applicant is a taxable person and the relevant activity is retailing goods.
- 02Map every supply stream
Separate retail goods from B2B sales, services, exempt goods, zero-rated goods and transactions outside the scheme.
- 03Select the calculation supported by the records
Use all-taxable, separately recorded mixed supplies or the purchase-ratio method, subject to approval.
- 04Apply for written approval
The application should explain the stores, systems, receipts, tills, goods classifications and proposed method.
- 05Implement the approval exactly
The Commissioner-General determines the authorisation period. Renewal is not automatic, and conditions remain binding.
Withdrawal risk: the Commissioner-General may withdraw the right to operate the scheme where regulatory conditions or applicable directives are breached.
The three operational paths
The correct method depends on whether the retailer can distinguish taxable and exempt retail takings.
| Method | When it applies | Monthly output calculation |
|---|---|---|
| Scheme 1 — positive-rated retail goods only | All takings within the approved retail calculation relate to goods bearing the positive VAT rate. | Add monthly daily gross takings and apply the current combined tax fraction. |
| Scheme 2 — mixed supplies separately recorded | Taxable and exempt retail takings can be reliably distinguished at the point of sale or in separate records. | Deduct recorded exempt takings from total daily gross takings and apply the fraction to the balance. |
| Scheme 3 — mixed supplies not separately recorded | Taxable and exempt retail takings cannot be distinguished, but reliable purchase-for-resale records exist. | Calculate taxable purchases for resale ÷ total purchases for resale; multiply by total daily gross takings; then apply the fraction. |
Zero-rated goods require separate treatment: a zero-rated supply remains taxable but bears 0%. Do not apply the 1/6 positive-rate fraction to a zero-rated taking. The classification and approved recording method must preserve the 0% result.
Daily gross takings
The monthly calculation begins with complete daily records—not a month-end estimate.
| Required control | Retail-scheme position |
|---|---|
| Each supply | Record the value and brief details as the supply occurs and before the goods leave the business premises. |
| Purchases | Keep copies of all purchase invoices issued by suppliers and classify goods purchased for resale. |
| Daily takings and payments | Use a cash register, book or other record to capture all daily gross takings received and cash payments made when they occur. |
| End-of-day close | Total takings received and cash payments made separately at the end of each day. |
| Monthly close | Aggregate the daily gross takings and record output tax on supplies and deductible input tax supported by qualifying tax invoices. |
| Reconciliation | Reconcile till or point-of-sale totals, cash, mobile money, cards, credit sales, refunds, voids, stock movements and the ledger. |
Daily gross takings are not merely closing cash: non-cash retail sales and movements affecting the retail sales record must be captured through the approved system and reconciled to the supply records.
MSL Business School 2026 fraction analysis
The current combined tax fraction is 20 ÷ 120, or 1/6.
Positive-rated retail prices contain VAT at 15%, NHIL at 2.5% and GETFund levy at 2.5% on the same base. A GHS 120 tax-inclusive taking therefore contains a GHS 100 taxable value and GHS 20 total tax.
| Component extracted from positive-rated gross takings | Fraction | Amount in GHS 120 |
|---|---|---|
| VAT | 15 ÷ 120 | GHS 15 |
| NHIL | 2.5 ÷ 120 | GHS 2.50 |
| GETFund levy | 2.5 ÷ 120 | GHS 2.50 |
| Total tax | 20 ÷ 120 = 1/6 | GHS 20 |
| Taxable value | 100 ÷ 120 = 5/6 | GHS 100 |
Report the components separately: the 1/6 is the combined extraction shortcut. It does not turn VAT, NHIL and GETFund levy into a single statutory tax or rate.
Worked calculations
Apply the method approved for the retailer's actual records.
Scheme 1 — all approved retail takings are positive-rated
Scheme 2 — exempt takings are separately recorded
Scheme 3 — purchase-ratio method
Do not deduct input tax in these output examples: the examples calculate output VAT and levies. Deductible input tax is determined separately under Act 1151 and the amended levy legislation.
Annual adjustment
The purchase-ratio method is corrected on each anniversary.
- 01Use annual purchase values
Replace monthly taxable and total purchases for resale with the corresponding values for the scheme year.
- 02Use annual daily gross takings
Replace monthly takings with total daily gross takings for that year.
- 03Recalculate annual output tax
Apply the same purchase-ratio method and the applicable fraction to the annual figures.
- 04Compare with tax previously calculated
Determine the difference between the annual result and total output tax calculated for the year.
- 05Adjust the next return
Account for the difference on the VAT return for the next accounting period.
Rate changes require an additional cut-off: where a tax rate changes, the regulations require an adjustment covering the period from the last adjustment to the rate-change date and subsequent anniversary adjustments.
Sales receipts, invoices and non-retail sales
Retail approval does not remove invoicing controls.
| Transaction | Document and accounting treatment |
|---|---|
| Approved retail sale to a consumer | Issue the approved sales receipt through the applicable authorised electronic or point-of-sale system and include the taking in the retail records. A sales receipt does not itself support an input-tax deduction; where the purchaser is registered and requests the required tax invoice, issue it with a reference to the receipt. |
| Sale to a VAT-registered business | Account under the normal VAT method and issue the tax invoice required under Act 1151; do not leave the sale inside an undifferentiated retail gross-takings calculation. |
| Service supplied by the business | Account under normal VAT rules with the applicable invoice or authorised receipt. The retail scheme for goods does not determine the service tax. |
| Exempt retail goods | Identify separately or include in the approved purchase-ratio method. Do not apply the positive-rate fraction to the exempt portion. |
| Zero-rated retail goods | Keep the statutory evidence and approved records preserving the 0% treatment. Do not treat zero-rated takings as positive-rated. |
| Disposal of a business asset or other non-retail supply | Account outside the retail scheme under the ordinary VAT rules applicable to the transaction. |
Input tax and return treatment
The retail calculation estimates output; it does not create an automatic input deduction.
Deductible input tax requires the tax invoice or customs entry required by Act 1151 and compliance with the six-month claim limit.
The purchase or import must be used wholly, exclusively and necessarily in the taxable activity, subject to the statutory restrictions.
Input directly attributable to exempt supplies is not deductible. Common input is apportioned under the Fifth Schedule rules.
The Scheme 3 purchase ratio estimates the taxable share of retail output; it is not automatically the Act 1151 input-tax apportionment formula.
Report output components and qualifying input credits on the VAT and levies return by the ordinary statutory deadline.
Where applicable, VAT withholding credits follow the separate certificate, return and reconciliation rules.
Keep the calculations separate: output extraction, input attribution, input apportionment and VAT withholding credits are four distinct return controls.
MSL Business School retail control file
A defensible retail return can be traced from every till to the VAT return.
| Control file | Evidence |
|---|---|
| Authorisation | Application, written approval, effective date, authorised period, scheme method, stores, devices, conditions and renewal. |
| Product tax map | SKU or product list identifying positive-rated, zero-rated and exempt goods with review dates and legal support. |
| Daily close | Till or POS reports, receipts, cash, cards, mobile money, credit sales, refunds, voids, discounts and cashier sign-off. |
| Purchase file | Supplier invoices, goods-for-resale classification and taxable-versus-total purchase analysis where Scheme 3 applies. |
| Non-retail file | B2B sales, services, asset disposals and other transactions removed from the retail calculation and invoiced normally. |
| Monthly bridge | Daily gross takings to taxable portion, component extraction, output ledger, input schedule and VAT return. |
| Annual adjustment | Annual purchase ratio, annual takings, output recomputation, comparison and next-return adjustment. |
| Retention | Keep the required VAT records for a minimum of six years. After that period, destroy them only with the Commissioner-General's written permission. |
Frequently asked questions
Ghana Retail VAT Scheme questions
What is the Ghana Retail VAT Scheme?
It is an authorised method by which a qualifying retailer of taxable goods calculates output VAT and levies from retail gross takings. It is an accounting method, not a reduced VAT rate.
Can a retailer start using the scheme without approval?
No. The taxable person must apply for and obtain the Commissioner-General's approval before using a retail scheme. The authorisation applies for the period determined by the Commissioner-General and may be renewed.
Who can apply to use the Retail VAT Scheme?
A taxable person that is a retailer of taxable goods may apply. Retail approval does not extend automatically to services, B2B supplies or other non-retail transactions.
Is the Retail VAT Scheme the old 3% flat-rate scheme?
No. The old 3% VAT Flat Rate Scheme for goods and the 5% flat-rate scheme for immovable property were abolished. The current retail scheme extracts the ordinary VAT and levies from approved retail gross takings.
What is the current retail tax fraction?
For positive-rated tax-inclusive takings, the combined VAT, NHIL and GETFund levy fraction is 20/120, or 1/6. The components are reported separately: VAT is 15/120 and each levy is 2.5/120 of the gross taking.
What are daily gross takings?
They are the retail takings recorded through the approved cash register, book or other system. The retailer records transactions and payments when they occur, totals takings and cash payments separately each day, and aggregates the daily takings for the month.
How are exempt goods treated?
If exempt takings are separately recorded, deduct them before applying the positive-rate fraction. If they cannot be separated, the approved purchase-ratio method estimates the taxable share from taxable purchases for resale divided by total purchases for resale.
How are zero-rated goods treated?
Zero-rated goods remain taxable but bear 0%. Their takings must not be subjected to the 1/6 positive-rate fraction; the retailer must preserve the required classification evidence and follow the approved recording method.
Can services be included in the retail calculation?
No. The regulatory retail scheme is for a retailer of taxable goods. Hotel accommodation, restaurant meals, catering and other services are accounted for under the ordinary VAT rules.
How are sales to VAT-registered businesses treated?
Account for non-retail or B2B supplies outside the retail scheme under the normal VAT method and issue the tax invoice required by Act 1151.
Does the retail fraction determine deductible input tax?
No. The retail calculation determines output. Deductible input tax is established separately from qualifying invoices or customs entries, taxable business use, restrictions, attribution and the statutory mixed-supply apportionment rules.
When is an annual adjustment required?
A retailer using the purchase-ratio method must make an adjustment on the anniversary of starting that method and on each subsequent anniversary, using annual purchases for resale and annual daily gross takings. The difference is adjusted on the next return.
MSL Business School legal reference map
Primary authority and operative framework
The scheme must be applied through the current Act, the continuing regulations and the taxpayer's written authorisation.
- Value Added Tax Act, 2025 (Act 1151), sections 3, 35, 36 and 43Current VAT rate, exempt and zero-rated classifications, tax invoices and authorised sales receipts.
- Act 1151, sections 48 to 52Output tax, deductible input tax, restrictions and mixed taxable-and-exempt input apportionment.
- Act 1151, sections 59 and 60Monthly return and payment framework.
- Act 1151, section 73Continuation of regulations, notices, directions and appointments made under the repealed VAT enactments to the extent they are not inconsistent with Act 1151 and until reviewed, cancelled or terminated.
- Value Added Tax Regulations, 2016 (L.I. 2243), regulations 22 to 29 and 31Sales receipts, retail-scheme application, records, three calculation paths, annual adjustment, authorisation, electronic devices, other schemes, withdrawal and the six-year record-retention rule.
- Act 1151, Fifth ScheduleInput-tax apportionment for mixed taxable and exempt supplies, distinct from the retail output purchase-ratio method.
- National Health Insurance and Ghana Education Trust Fund legislation, as amendedNHIL and GETFund levy at 2.5% each and the current input-credit framework.
- Revenue Administration Act, 2016 (Act 915), as amendedRecords, assessments, corrections, interest, penalties and enforcement.
Authority hierarchy: legislation and valid continuing subsidiary rules determine the legal position. The written retail-scheme approval determines how the authorised taxpayer must apply that framework in practice.
Institutional publisher
TaxLawGH is MSL Business School's Ghana tax education platform.
This guide forms part of MSL Business School's public tax and fiscal policy education work. MSL publishes TaxLawGH to make Ghana's tax law accurate, understandable and useful to taxpayers, practitioners, businesses, students and policy professionals.
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