The Minister of Finance, Dr. Cassiel Ato Forson, has announced the abolition of the COVID-19 Health Recovery Levy, commonly known as the “COVID-19 levy.”
The move forms part of a broader tax reform initiative under the Value Added Tax (VAT) Act aimed at simplifying Ghana’s tax system.
Introduced in March 2021 through the COVID-19 Health Recovery Levy Act, 2021 (Act 1068), the 1% levy was imposed on the supply of goods and services as well as imports to generate revenue for Ghana’s COVID-19 response.
Originally designed as a temporary fiscal measure, it helped finance pandemic-related health expenditures.
Dr. Forson explained that the emergency period had ended and that the government now seeks to “normalise the fiscal architecture” through tax consolidation.
The reform is part of a comprehensive review of Ghana’s VAT regime to simplify the structure, eliminate the cascading effect of multiple levies, and reduce compliance burdens for businesses and consumers.
The move aligns with recommendations from the International Monetary Fund (IMF) and key stakeholders, who support consolidating various levies into a unified system to enhance efficiency and revenue transparency.
Presenting the 2026 Budget Statement and Economic Policy, Dr. Forson stated that “the COVID-19 levy has been abolished.”
The removal of the levy is expected to provide modest relief to consumers and businesses by reducing the overall cost of goods and services and easing administrative pressures—particularly for small enterprises in the informal sector.
However, the government faces potential revenue shortfalls, as the levy has become a notable contributor to public finances.
Studies indicate that eliminating both the COVID levy and the E-levy could result in a revenue loss exceeding GHS 22 billion between 2025 and 2027.
To offset this, the government intends to pursue alternative measures, including tightening tax exemptions, improving compliance, and streamlining VAT administration.
