TaxLawGHby MSL Business School
MSL Business SchoolGhana VAT classification guide
Ghana VAT: exempt, zero-rated and relief supplies
The definitive classification guide to Ghana's exempt supplies and imports, zero-rated goods and services, relief supplies, documentary proof and input-tax consequences.
Published and prepared by MSL Business School through TaxLawGH, its tax and fiscal policy education platform.
MSL Business School VAT classification at a glance
TaxLawGH by MSL Business SchoolThis print view is a summary. Use the live guide at taxlawgh.com/ghana-vat-exempt-zero-rated-relief for the complete, current and interactive resource.
MSL Business School classification position
Exempt supplies, zero-rated supplies and relief supplies are three different statutory treatments.
Controlling rule: a supply is exempt only if the First Schedule covers it; a taxable supply is zero-rated only if the Second Schedule covers it; and relief is available only through section 38 and the Third Schedule, within their scope and conditions.
Do not classify a transaction from its social importance, the customer's status, an industry label or past practice. Apply the current statutory wording to the actual goods, services, supplier, recipient, use, location and evidence.
The three statutory treatments
The output result and the input-tax result are not the same.
| Treatment | Output VAT and levies | Input-tax position | Legal gateway |
|---|---|---|---|
| Exempt supply | No VAT, NHIL or GETFund levy is charged on the exempt supply. | Input tax on purchases or imports for exempt supplies is not deductible. Mixed-use input requires attribution and apportionment. | The goods or services must fall within the First Schedule. |
| Zero-rated supply | VAT, NHIL and GETFund levy apply at a rate of 0%. | The supply remains taxable, so qualifying input tax remains deductible subject to the ordinary rules. | The supply must fall within the Second Schedule and documentary proof acceptable to the Commissioner-General must be retained. |
| Relief supply | The qualifying person, organisation or matter obtains relief through the statutory mechanism. | The result follows the prescribed relief mechanism and the supplier's ordinary accounting treatment; relief is not a substitute for zero-rating. | Section 38 grants relief on taxable imports of goods and taxable supplies of goods acquired in Ghana, for the persons, organisations and matters in the Third Schedule and subject to its conditions. |
| Outside scope | No Ghana VAT arises because the transaction is not within the charging provisions. | Input-tax consequences follow the use and the applicable deduction rules. | This is not an exemption. It follows from the charging, supply and place-of-supply rules. |
Priority rule: a supply covered by the zero-rating rules is not treated as exempt. Test zero-rating separately after identifying any First Schedule wording.
First Schedule — food, farming and fishing
Raw local food products and specified agricultural supplies are exempt within defined limits.
| Exempt category | Exact coverage and boundary |
|---|---|
| Raw agricultural and aquatic food produced in Ghana | Maize, sorghum, millet, tubers, guinea corn, rice, fish other than ornamental fish, crustaceans, molluscs, vegetables and fruits, nuts, coffee, cocoa beans, shea butter, and qualifying edible meat and offal. Simple preparation or preservation—including freezing, chilling, drying, salting, smoking, stripping or polishing—does not by itself remove raw-state treatment. |
| Meat and offal boundary | The meat must be from the listed cattle, sheep, goats, swine or poultry. Processing is restricted to salting, smoking or similar processes; pâté, fatty livers of geese and ducks, and similar products are excluded. |
| Live animals bred or raised in Ghana | Cattle, sheep, goats, swine and poultry. |
| Agricultural propagation inputs | Seeds, bulbs, rooting and other propagation forms for edible fruits, nuts, cereal crops, tubers and vegetables, including seedlings and cuttings. |
| Agricultural chemicals, veterinary and feed inputs | Fertilisers, acaricides, insecticides, fungicides, nematicides, herbicides, growth regulators, pesticides, veterinary drugs and vaccines, feed and feed ingredients. Food, drugs and vaccines for domesticated animals generally kept as pets are excluded. |
| Fishing gear | Gear designed exclusively for fishing, including canoes, boats, nets, floats, twines and hooks. |
| Fishing-production materials | Imports and supplies of raw material used to produce nets, twines and goods produced for fishing. |
Origin matters: the raw-food and live-animal exemptions expressly require production, breeding or raising in Ghana. Product identity alone is not enough.
MSL Business School public-interest supply map
Water, dwelling electricity, education, health and domestic passenger transport have specific exemptions.
| Exempt category | Coverage and exclusions |
|---|---|
| Water | Water is exempt, excluding water commonly supplied in bottles or other consumer packaging. |
| Electricity | Electricity supplied to a dwelling is exempt. The premises must satisfy the statutory dwelling definition. |
| Approved educational publications | Textbooks and supplementary readers on the Ministry responsible for Education's approved list, together with newspapers, atlases, charts, maps and music. |
| Excluded printed matter | The exemption does not cover imported textbooks, exercise books, newspapers, publications or charts; architectural or similar plans; drawings; scientific and technical works; periodicals; magazines; trade catalogues; price lists; greeting cards; almanacs; calendars; diaries; stationery or other printed matter. |
| Education services | Services supplied to pupils or students as part of the education programme of a duly registered or licensed day-care provider, pre-primary, primary or secondary school, technical or community college, university, adult-education, vocational or technical institution, or institution for the education or training of persons with physical or mental challenges. |
| Education equipment | Laboratory and library equipment supplied for use in providing education services. |
| Medical services | Medical, dental, nursing, midwifery or paramedical services performed by or under the supervision and control of a person registered as qualified by the Minister responsible for Health. Spa, gymnasium and similar services are excluded. |
| Medical supplies | Equipment and accessories for medical services approved by the Minister responsible for Finance in consultation with the Minister responsible for Health. |
| Pharmaceuticals and inputs | Pharmaceuticals supplied in Ghana; prescribed active ingredients and selected manufacturing inputs; and prescribed selected imported drugs or pharmaceuticals. “Pharmaceuticals” is confined to essential drugs in Chapter 30 of the 2022 Harmonised System classification. |
| Domestic passenger transport | Domestic passenger transport by road, rail or water. Haulage and rental or hiring of passenger or other vehicles are excluded. |
Provider and use tests matter: education and medical exemptions depend on the statutory provider, licensing, supervision, use and approval conditions—not merely the words “school”, “training”, “clinic” or “medical” on an invoice.
First Schedule — machinery, energy and specified goods
Industrial exemptions apply only to the machinery, product or import described by the Schedule.
| Exempt category | Coverage and condition |
|---|---|
| Purpose-designed machinery and parts | Machinery and parts specifically designed for agriculture, veterinary practice, fisheries, aquaculture and horticulture; mining items on the prescribed mining list; manufacturing; railway and tramway; upstream petroleum items on the prescribed petroleum list; and dredging. |
| Crude oil and hydrocarbon products | Crude oil, petrol, diesel, liquefied petroleum gas, kerosene—including aviation turbine kerosene—residual fuel oil and natural petroleum gas. |
| Disability goods | Goods designed exclusively for use by persons with disability. |
| Ghana Post stamps | Postage stamps issued by Ghana Post, excluding stamps for expedited services or philatelic purposes. |
| Basic and protective goods | Salt for human consumption, including table salt; mosquito nets whether or not chemically infused; and paper for producing exercise books and textbooks. |
| Machete-manufacturing input | Import of mild carbon steel for manufacturing machetes. |
| Automobile programme imports | Plant and machinery specifically designed for the automobile industry and kits imported by a manufacturer or assembler registered under the Ghana Automotive Manufacturing Development Programme. |
| Public-transport electric vehicles | Importation of electric vehicles for public transportation. |
No general industrial exemption: ordinary tools, spare parts or multipurpose equipment do not qualify merely because a manufacturer, miner, farmer or petroleum business buys them. The statutory design, prescribed-list and use tests must be met.
First Schedule — property, public works and finance
Property and financial-service exemptions turn on statutory definitions and exclusions.
The Schedule exempts supplies of immovable property, including land used or intended for a dwelling, but excludes supplies of immovable property by an estate developer.
Accommodation in a dwelling is exempt. A dwelling is residential accommodation that is not a commercial rental establishment and is used or intended predominantly as a natural person's residence.
Land used or to be used for agricultural purposes is exempt.
Qualifying construction and related work must be for public use and paid for with public funds. The definition includes roads, bridges, schools, dams, railroads and hospitals.
Financial services—including insurance, dealing in money, credit and bank-account operations—are exempt except non-life insurance as statutorily defined.
The Act defines “non-life insurance” for this exclusion as non-life insurance other than motor vehicle insurance. Life insurance and motor vehicle insurance therefore remain within the exempt financial-services category; other non-life insurance is excluded from the exemption.
Property caution: estate-developer status, the form of supply, the nature of the premises, duration, utilities and furnishings can change the result. Hotels, guesthouses and other commercial rental establishments are not dwellings.
MSL Business School zero-rated goods map
The Second Schedule applies 0% to specified exports, free-zone and other qualifying goods.
| Zero-rated goods supply | Statutory condition |
|---|---|
| Goods exported by the supplier | The supplier enters the goods for export under the Customs Act and exports them from Ghana. Alternatively, the Commissioner-General must be satisfied that the supplier exported the goods without domestic use after entry except use necessary or incidental to export. |
| Export controls | Immediately before loading, the goods must be produced to Customs for examination; samples must be provided on demand; receipt on board must be certified on the export document; and the goods must appear in the cargo manifest. |
| Goods used exclusively abroad | Goods supplied under a rental agreement, charter party or chartering agreement are zero-rated where used exclusively in an export country. |
| Stores for foreign-going aircraft or vessels | Goods shipped as stores on a qualifying foreign-going aircraft or vessel leaving Ghana for an export-country destination. |
| Free-zone supplies | Goods supplied to a free-zone developer or enterprise where satisfactory documentation proves that the operation and acquisition procedure comply with the Free Zone Act. |
| Going concern | Goods forming part of the transfer of a taxable activity as a going concern from one taxable person to another, provided the statutory conditions and required notices are satisfied. |
| Tourist exports | Exports by tourists and similar persons only where and to the extent Regulations provide the zero-rating terms and conditions. |
| Locally manufactured textiles | Supplies through 31 December 2028 by a local manufacturer approved by the Minister responsible for Trade, Agribusiness and Industry. |
| Locally manufactured sanitary towels | Supplies of locally manufactured sanitary towels. |
Re-importation exclusion: goods are not treated as exported where the supplier has re-imported or will re-import them into Ghana.
Second Schedule — zero-rated services
Only the seven listed service categories are zero-rated.
| Zero-rated service | Required connection |
|---|---|
| Foreign land | Services directly connected with land or an improvement to land situated outside Ghana. |
| Foreign personal property | Services directly concerning personal property situated outside Ghana when the services are rendered. |
| Intellectual property for foreign use | Filing, prosecution, granting, maintenance, transfer, assignment, licensing or enforcement of intellectual-property rights for use outside Ghana. |
| Export freight and insurance | Freight and insurance directly attributable to the export of goods. |
| Transit and transshipment stevedoring | Stevedoring related to transit and transshipment. |
| Transit and transshipment port operations | Port-operation services related to transit and transshipment. |
| Transit and transshipment shipping-line charges | Shipping-line charges related to transit and transshipment. |
Export-service caution: a foreign customer, foreign-currency payment or remote delivery does not by itself create zero-rating. The service must satisfy the precise Second Schedule category.
MSL Business School relief beneficiary map
Relief belongs only to the persons, organisations and matters in the Third Schedule.
| Person, organisation or matter | Conditions and scope |
|---|---|
| President of the Republic | The President is a statutory relief beneficiary. |
| Embassies, missions and consulates | Supplies for official use of a Commonwealth or foreign embassy, mission or consulate, subject to reciprocal treatment for Ghana's representatives. |
| Permanent diplomatic-service members | Supplies for a qualifying permanent member of a Commonwealth or foreign diplomatic service who is exempted by Parliament from customs duties, subject to reciprocity. |
| International agencies and technical-assistance schemes | Supplies for use under an agreement with Government approved by Parliament that expressly includes exemption from domestic indirect taxes. |
| Emergency relief items | Emergency relief items approved by Parliament. |
| Registered manufacturers' imported raw materials | The manufacturer must be VAT registered, a member in good standing of the Association of Ghana Industries, have submitted all previous VAT returns and paid VAT, penalties and interest from previous tax periods, satisfy the Commissioner-General's other compliance requirements, appear in the register published on 1 January and updated every six months, and use the raw materials solely and exclusively in the beneficiary's manufacturing operations. |
| Reconnaissance and prospecting | Goods or services connected with reconnaissance or prospecting supplied to a holder of the relevant licence under the Minerals and Mining Act who is registered with the Ghana Revenue Authority. |
Section 38 grants relief from VAT on taxable imports of goods and taxable supplies of goods acquired in Ghana by the Third Schedule persons, organisations and matters. The Schedule separately describes goods or services connected with qualifying reconnaissance or prospecting; that item must still be applied through section 38 and the prescribed relief process. The Act permits Regulations to prescribe the method for obtaining relief. Where relief operates by refund, the claim must follow the prescribed form and time and include proof that the tax was paid.
Component restriction: relief generally does not extend to raw materials, parts or services that are or may become components of goods for which relief is granted. The special registered-manufacturer relief for imported raw materials is expressly excepted from that restriction.
Exempt imports and customs classification
Act 1151 defines exempt imports through the First Schedule and the Harmonised System exemption list.
Imported goods are exempt where the First Schedule covers the goods and every origin, use, approval or other condition applicable to that item is satisfied.
Goods classified as exempt imports under Part C of the Third Schedule to the Harmonised Commodity Description and Coding System are exempt.
A Third Schedule beneficiary may obtain relief on taxable imports, while the Exemptions Act governs other authorised exemption processes. Neither route converts the goods into generally exempt imports.
Retain the tariff classification, customs entry, invoice, permits, approvals, end-use evidence and any statutory relief documentation supporting the treatment.
Classification control: a domestic product description is not a substitute for a customs classification. Imports should be tested against the current Harmonised System code and the exact statutory condition.
Input tax and mixed supplies
Exempt activity breaks the input-credit chain; zero-rated activity does not.
| Input category | Deduction treatment |
|---|---|
| Directly attributable to taxable or zero-rated supplies | Deductible subject to the ordinary taxable-use, invoice, timing and restriction rules. |
| Directly attributable to exempt supplies | Not deductible. |
| Common input for taxable and exempt supplies | Apportion A × B ÷ C, where A is residual common input tax, B is total taxable supplies and C is total supplies. |
| Taxable-supply ratio below 5% | No input-tax deduction for the period under the statutory de minimis rule. |
| Taxable-supply ratio above 95% | The entire otherwise allowable input tax on taxable purchases and imports may be deducted. |
| Ratio exactly 5% or exactly 95% | The ordinary attribution and Fifth Schedule apportionment rules apply; the special below-5% and above-95% outcomes do not. |
| Bank or other financial institution making taxable and exempt supplies | The deduction is limited to input tax on supplies or imports directly attributable to taxable supplies. The ordinary residual-input apportionment concession does not apply. |
Where deductible input exceeds output tax, the excess is ordinarily credited forward. The Commissioner-General may refund the export-attributable portion where exports exceed 25% of total supplies and the export proceeds have been repatriated through the prescribed banking route. An application for that export refund may be made when the excess credit remains outstanding for a continuous period of three months or more. Excess directly attributable to locally manufactured zero-rated textiles or sanitary towels, and qualifying relief-related excess, has the specific refund routes in section 53.
Levy alignment: under the 2026 regime, NHIL and GETFund levy participate in the input-output credit system and follow the exempt and zero-rated treatment of the underlying supply.
MSL Business School classification workflow
Classify the transaction before issuing the invoice.
- 01Identify the actual supply
Separate each good, service and incidental element. Record the supplier, recipient, consideration, location, use and date.
- 02Confirm Ghana VAT scope
Apply the supply, taxable-activity and place-of-supply rules. Do not label an outside-scope transaction exempt.
- 03Test the First Schedule
Match every word of the relevant exemption, including origin, design, licensing, approval, recipient, end-use and exclusion clauses.
- 04Test the Second Schedule
Determine whether the supply is zero-rated and assemble the export, free-zone, approval or other documentary proof.
- 05Test Third Schedule relief
Verify beneficiary status, reciprocity, parliamentary approval, licence, registration, compliance and prescribed relief procedure as applicable.
- 06Determine input-tax treatment
Directly attribute purchases, calculate the taxable-supply ratio and apportion residual input tax.
- 07Invoice and report consistently
Use the correct E‑VAT classification and reconcile the invoice, ledger, return and evidence file.
Worked mixed-supply example
Common input tax is apportioned by the taxable share of total supplies.
A VAT-registered business makes GHS 800,000 of taxable supplies, including zero-rated supplies, and GHS 200,000 of exempt supplies in the month. It has GHS 30,000 of otherwise allowable input VAT and levies that cannot be directly attributed.
Direct attribution first: input used only for taxable supplies is tested separately for deduction; input used only for exempt supplies is denied. Only the residual common pool enters this calculation.
MSL Business School evidence checklist
Every non-standard treatment needs a transaction-level evidence file.
- 01Write the legal classification
Identify the exact First, Second or Third Schedule item and document how each statutory condition is met.
- 02Prove product identity and origin
Keep specifications, HS codes, production records, supplier declarations and local-origin evidence where the Schedule requires them.
- 03Prove provider and recipient status
Retain licences, registrations, approvals, diplomatic or agency status and beneficiary details.
- 04Prove use
Keep contracts, delivery records, installation evidence, asset registers and end-use declarations for use-dependent treatment.
- 05Prove export or free-zone conditions
Keep export entries, customs examination and manifest evidence, transport documents, foreign-delivery proof and free-zone compliance documents.
- 06Control relief procedures
Confirm the statutory beneficiary, approval, reciprocity, published register or licence and the prescribed acquisition or refund process before relying on relief.
- 07Reconcile input tax
Directly attribute purchases, preserve the common-input pool and review the apportionment calculation each tax period.
- 08Review the invoice code
Ensure the E‑VAT document, ledger and return all use the same exempt, zero-rated or relief classification.
Frequently asked questions
Ghana VAT classification questions
What is the difference between exempt and zero-rated VAT in Ghana?
An exempt supply is not subject to VAT, and input tax on purchases or imports for exempt supplies is not deductible. A zero-rated supply is a taxable supply charged at 0%, so qualifying input tax remains deductible.
Do VAT exemptions also cover NHIL and GETFund levy?
Yes. Goods and services exempt from VAT are also exempt from NHIL and GETFund levy. Items zero-rated for VAT also attract a zero rate of both levies.
Is every food product exempt from VAT?
No. The Schedule exempts specified raw agricultural and aquatic food produced in Ghana, subject to its product, origin and processing limits. Processed, imported or unlisted food does not qualify merely because it is food.
Is bottled water exempt from VAT?
No. The water exemption excludes water commonly supplied in bottles or other packaging suitable for supply to consumers.
Are all education and training services exempt?
No. The service must form part of the education programme of an establishment within the statutory definition and the establishment must be duly registered or licensed by the Minister responsible for Education.
Are all medical and wellness services exempt?
No. The medical-service exemption requires a qualifying service performed by or under the supervision and control of a registered health professional. Spas, gymnasiums and similar services are excluded.
Is residential accommodation exempt?
Accommodation in a statutory dwelling is exempt. A dwelling excludes a commercial rental establishment, so hotels, guesthouses and other qualifying short-stay or furnished commercial accommodation do not obtain the dwelling exemption.
Is every supply to a government body or charity exempt?
No. Government, public-benefit or charitable status does not create a general VAT exemption. The transaction must fit a current statutory exemption, zero-rating or relief provision.
Does supplying a foreign customer make a service zero-rated?
No. The service must fall within one of the seven service categories in the Second Schedule. Customer residence or foreign-currency payment alone is insufficient.
What proof is required for zero-rating?
The taxable person must obtain and retain documentary proof acceptable to the Commissioner-General that substantiates the right to apply the zero rate. The exact evidence follows the category, such as customs export, manifest, free-zone, approval or foreign-use documents.
Can input tax be claimed on costs of exempt supplies?
No. Input tax on purchases or imports for exempt supplies is not deductible. Common input for taxable and exempt supplies must be attributed and apportioned under the statutory rules.
Can a contract or exemption letter create a VAT exemption?
Not by itself. Subject to the Exemptions Act, an exemption or zero-rating outside Act 1151 or its Regulations does not take effect for VAT until a corresponding amendment is made to the VAT Act.
MSL Business School legal reference map
Primary authority and section map
The practical guide above is consolidated here against the controlling statutory provisions.
- Value Added Tax Act, 2025 (Act 1151), sections 1 and 33 to 38Charging rule, taxable supplies, exempt supplies, zero-rated supplies, exempt imports and relief.
- Act 1151, First ScheduleThe complete list of exempt supplies and relevant exempt-import categories.
- Act 1151, Second ScheduleZero-rated goods and services, export controls, free-zone supplies, going concerns, approved textiles and locally manufactured sanitary towels.
- Act 1151, Third ScheduleRelief beneficiaries and matters, including diplomatic, international-agency, emergency, manufacturing and reconnaissance or prospecting relief.
- Act 1151, sections 49 to 52 and Fifth ScheduleInput-tax entitlement, restrictions, direct attribution, mixed-supply apportionment and the taxable-supply ratio thresholds.
- Act 1151, section 65Recovery from a recipient whose fraud or misrepresentation caused incorrect exempt, zero-rated or relief treatment.
- Act 1151, sections 72 to 75Definitions, continuation of consistent existing instruments, transitional restriction and commencement on 1 January 2026.
- Ghana Education Trust Fund and National Health Insurance legislation, as amendedNHIL and GETFund levy alignment with exempt and zero-rated supplies and the 2026 input-output deduction framework.
- Exemptions Act, 2022 (Act 1083)General statutory framework for tax exemptions, read with Act 1151's requirement for a corresponding VAT amendment.
- Harmonised Commodity Description and Coding System, Third Schedule Part CAdditional exempt-import classifications referenced by section 37 of Act 1151.
Authority hierarchy: the current legislation and valid subsidiary instruments determine the result. Administrative summaries can explain implementation but cannot expand the statutory list or waive a condition.
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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