Ghana Government Finally Approves Abolition of COVID-19 Levy, Bringing Relief to Citizens

The President of Ghana has officially approved the abolishment of the COVID-19 Health Recovery Levy, signing an Act to repeal the measure introduced in 2021. This move, which comes as part of a broader fiscal strategy and Value Added Tax (VAT) reform agenda, is intended to provide significant financial relief to Ghanaian households and businesses.

​A Promise Fulfilled: Scrapping the Pandemic-Era Tax

​The decision to scrap the COVID-19 Levy fulfills a key campaign promise and marks a significant step in the government's plan to ease the cost of living and doing business in Ghana. The levy, which imposed a one percent charge on the supply of goods and services, was initially instituted to raise revenue for pandemic recovery and the maintenance of essential healthcare infrastructure.

​Finance Minister Dr. Cassiel Ato Forson announced the measure, which is part of the proposals within the 2026 Budget Statement. The government projects that the abolition of the levy will "give back" an estimated GH₵5.7 billion (or GH₵3.7 billion, according to some reports) to businesses and individuals in 2026 alone.

​Broader VAT Reform and Economic Impact
​The abolition of the COVID-19 Levy is not an isolated measure but is integrated into a sweeping overhaul of the nation's VAT system, which aims to make the tax regime simpler, more equitable, and growth-oriented.

​Key components of the overall tax reform package include:

​Reduction in the Effective VAT Rate: The effective VAT rate is expected to be reduced, easing the overall tax burden on consumers and businesses.

​Increased VAT Registration Threshold: The threshold for mandatory VAT compliance has been raised significantly, from GH₵200,000 to GH₵750,000, relieving thousands of micro and small enterprises from heavy administrative and compliance burdens.

​Decoupling of GETFund and NHIL: The government is reversing a previous measure, making both the Ghana Education Trust Fund (GETFund) and the National Health Insurance Levy (NHIL) eligible for input tax deductions again.

​Looking Ahead
​By scrapping the COVID-19 Levy and implementing the comprehensive VAT reforms, the government is signalling its commitment to a post-pandemic economic recovery centered on stimulating private sector growth and alleviating household financial pressure. The Finance Minister has expressed confidence that these changes will help restore investor confidence, ease inflationary pressures, and support Ghana's long-term economic development goals, which includes a forecast of at least 4.8 percent GDP growth next year.

​The passing of the Act formally abolishing the levy is seen by many as a tangible measure to improve the financial well-being of Ghanaians at a critical time for the economy.