Dr. Cassiel Ato Forson
Source: Africa Publicity
In a move to streamline the tax regime and ease financial pressures on citizens and businesses, the Government of Ghana has officially abolished the COVID-19 Health Recovery Levy. The 1% levy, introduced in 2021 to support Ghana’s economic recovery from the COVID-19 pandemic, had faced widespread opposition due to its perceived inequity and burden on low-income individuals.
While presenting the 2025 Budget Statement in Parliament, Finance Minister Dr. Cassiel Ato Forson confirmed the government’s decision to eliminate the levy. “Mr Speaker, the parameters for the VAT reforms, which will be completed this year, will include: abolishing the COVID-19 Levy,” he announced.
The abolition of the levy is expected to result in a significant revenue loss, approximately GH¢6.4 billion in 2025. However, the government plans to offset this loss by optimizing tax policies, particularly reviewing and minimizing port exemptions. The Finance Minister’s announcement also hinted at upcoming VAT reforms, which will be completed this year.
The decision to scrap the COVID-19 levy has been welcomed by many Ghanaians, who had questioned the continued relevance of the tax as the pandemic waned and daily life returned to normal. The Ghana Union of Traders Association (GUTA) had notably called for the abolition of the COVID-19 levy and other taxes, reflecting a broader sentiment that these taxes had outlived their necessity.
As the government moves forward with its tax reforms, it remains to be seen how the revenue gap will be bridged. However, with the abolition of the COVID-19 levy, Ghanaians can expect some relief from the financial burdens imposed by the tax.
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