vat flat rate scheme in ghana

How the VAT flat rate (3%) scheme works in Ghana

Isaac Nana Opoku

There are two types of VAT systems in Ghana: the Standard scheme and the Flat rate. While the former comes with a composite percentage of 17.5%, the latter is 3%. The objective of this short article is to equip readers with knowledge on how to compute the 3%  VAT Flat rate scheme (VFRS).

Before we start to look at how it is computed, let us take note of the following:

  1. VAT inclusive/Invoice amount: This is the amount served by a seller to a buyer for payment for the supply of a good or service. It is an invoice amount that has the VAT in it. In percentage terms, this is 103%.
  2. VAT exclusive amount: This refers to an invoice amount that does not have the VAT in it. In percentage terms, this is 100%. What makes this different from the first is the VAT of 3%.
  3. 3% Vat flat rate scheme in ghana applies to only retailers and wholesalers. All others that fall outside this group should apply the standard scheme to their operations.

Computations under 3% Flat rate VAT

Step 1: Decide on the amount that you will charge a customer or buyer for a good or service. This is what is called the VAT exclusive amount, say GHS200.

Step 2: Calculate 3% on the VAT-exclusive amount. Using the GHS200 in step one, we get GHS6 (GHS200*3%)

Step 3: Add the two results or amounts in Steps 1 and 2 to get the amount to charge the customer. Thus, the customer pays GHS206 for the product. This is how computations take place under  3% vat flat rate scheme in Ghana.


  • The amount in Step 1 or the VAT exclusive amount is the total amount that becomes the revenue of the seller (thus, the GHS200).
  • The GHS60 (VAT payable) in Step 2 is an amount that must be paid to GRA.
  • Finally, when the seller receives the GHS260 from the customer, he will retain GHS200 as his revenue and remit the GHS60 to GRA as VAT.


  1. Ghana Tax Calculator Mobile App | Building Accounting
    May 13, 2020

    […] Thus, it came as no surprise for us to see our article on invoices, How to Invoice with the new VAT system in Ghana, is oneΒ  of our most read articles on the Builders Blog. Now, let us tell you […]

  2. Kwesi Yeboah
    September 30, 2020

    nice article. but I think you should check the calculations for the example. 200*0.03 is 6 not 60. however, its a useful write up. thanks

  3. Bernard Essel
    June 3, 2021

    please is the 3% VAT flat rate claimable when filing returns?

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

More great articles

tax calculator ghana

Ghana Tax Calculator App

As business owners and accounting professionals we work with taxes on a daily basis. Finding a way to simplify how…

Read Story
All you need to know about VAT system in Ghana

What to know about VAT registration

Many have heard about the Valued Added Tax (VAT) system in Ghana. While some have an appreciable knowledge of what…

Read Story
tax policy reforms in Ghana

Boosting Your Business in 2019; New Tax Policy Reforms To Consider In Your Budget Preparation.

A new year is fast approaching, and every business owner is looking forward to a much more promising year ahead.…

Read Story

Never miss a minute

Get regular dose of finance, tax and accounting insights delivered directly to your inbox

    From invoicing, billing, financial statements to payroll, we've got you covered!

    Join over 1,500 businesses who use Built to manage their business finances.