VAT on medicines in Ghana: what is exempt and what is taxed

A customer at a pharmacy in Kumasi buys a box of tablets, a tube of toothpaste and a bottle of Voltic. Should the receipt show VAT on all three, on some, or on none? Many owners are not sure, and the till often just applies the same rate to everything.

This article sets out what the Ghana Revenue Authority (GRA) says, as of October 2026, and how to set your till up so each line is treated the way the law treats it. It is a guide, not tax advice. For a particular product, or for your own registration, check with GRA or your accountant.

Which taxes apply in Ghana in 2026?

Under the Value Added Tax Act, 2025 (Act 1151), which GRA says took effect from 1 January 2026, VAT is 15%, the National Health Insurance Levy (NHIL) is 2.5% and the GETFund Levy is 2.5%, all on the same value. Our article on what changed on your receipts in 2026 explains the reform in full.

• 15%VAT
• 2.5%NHIL
• 2.5%GETFund Levy
• NoneOn exempt supplies

Source: Ghana Revenue Authority, VAT and VAT exemptions pages

A note on names: NHIL is a levy collected with VAT. It is not the same thing as NHIS claims for patients, which are a separate scheme.

Are medicines exempt from VAT in Ghana?

Some are. GRA's VAT exemptions page lists, under medical supplies: "Medical services, essential drugs as listed under Chapter 30 of the 'HS Code' produced or supplied in Ghana, specified active ingredients for essential drugs, and selected imported special drugs determined by the Minister for Health and approved by Parliament."

The same page says: "All goods and services exempt from VAT are also exempt from the NHIL and GETFund." So an exempt medicine carries no VAT, no NHIL and no GETFund on your receipt.

Read the wording carefully. It does not say every product on a pharmacy shelf is exempt. It names essential drugs under a specific chapter of the customs tariff (the HS Code), active ingredients that are specified, and imported special drugs chosen by the Minister for Health with Parliament's approval. Whether a particular product falls inside that list is a question for GRA, your supplier's invoice and your accountant, not a guess at the counter.

What about the other things a pharmacy sells?

Most pharmacies and chemical shops sell more than medicines: toothpaste, soap, body cream, baby diapers, sanitary products, drinks such as Milo and Voltic, and sometimes supplements. These are not covered by the medicines exemption just because a pharmacy sells them. Each has its own tax status under the Act, which may be standard-rated, exempt or something else.

Set each product's tax status once, when you create it, and only change it when you have confirmed the answer.

How does a mixed receipt work?

A receipt with both exempt and taxable lines shows tax only on the taxable lines. Here is a worked example with tax-inclusive prices, for a VAT-registered pharmacy.

GH₵84.00

• Exempt medicineGH₵60.00 (71.4%)
• Toothpaste before taxGH₵20.00 (23.8%)
• VAT 15%GH₵3.00 (3.6%)
• NHIL 2.5%GH₵0.50 (0.6%)
• GETFund 2.5%GH₵0.50 (0.6%)

Source: Example figures; rates from the Ghana Revenue Authority

The medicine is GH₵60 with no tax added. The toothpaste is priced at GH₵24 including tax, which is GH₵20 before tax plus GH₵3 VAT, 50 pesewas NHIL and 50 pesewas GETFund. The customer pays GH₵84, and the receipt shows GH₵4 of tax, all of it on the toothpaste.

If the till had charged tax on the whole basket, you would have collected tax that is not due on the medicine, and your tax report would be wrong.

Do you have to charge VAT at all?

Only if your business is registered for VAT. If you are not registered, you should not add VAT, NHIL or GETFund to a receipt at all. If you are registered, you must charge them correctly on taxable lines and show them properly.

Who must register is set by the Act and explained by GRA. Check your own position with GRA rather than copying what another shop does. Our 2026 VAT article covers the question in more detail.

Setting up VAT-exempt medicines in MPOS

MPOS works out VAT 15%, NHIL 2.5% and GETFund 2.5% on the same price, as the VAT Act 2025 requires. Prices include tax by default, so the shelf price is what the customer pays. Any item can be marked VAT-exempt, and exempt lines carry no tax on the receipt.

1. 1List your products by type: medicines, toiletries, drinks, others
2. 2Confirm with GRA or your accountant which are exempt
3. 3Mark exempt items as VAT-exempt in the product list
4. 4Leave taxable items on the standard rates
5. 5Print a test receipt with one of each
6. 6Check the tax report at the end of the first week

Receipts show the tax breakdown, whether printed on a thermal printer, sent by WhatsApp or produced as an A4 invoice. The tax report for any period shows what you collected.

Two things MPOS does not do: it does not connect to GRA's E-VAT e-invoicing system, and it does not handle NHIS or insurance claims. If GRA requires you to issue E-VAT invoices, you will need a separate solution for that.

What to do next

Print your product list and mark each line: medicine, toiletry, drink or other. Take the medicines you are unsure about to your accountant or GRA, and set the tax status once it is confirmed. Then test a mixed receipt before your next busy morning.

For the rest of running the shop, see the complete guide to running a pharmacy in Ghana. To try exempt and taxable lines on your own receipts, start a free trial.