Parliament scraps COVID-19 levy

Parliament has moved to eliminate the COVID-19 Health Recovery Levy, a tax introduced during the Akufo-Addo administration to support pandemic-related spending.

The decision follows the Finance Minister’s announcement in the 2026 Budget Statement that the levy would be removed as part of broader fiscal reforms aimed at reducing the financial strain on households and businesses.

According to the government, the move is intended to boost economic growth, ease the cost of living, and provide relief to the private sector. Finance Minister Dr. Cassiel Ato Forson explained that the levy, established under the COVID-19 Health Recovery Levy Act, 2021 (Act 1068), has outlived its original purpose. He emphasized that the move is part of a wider Value Added Tax (VAT) reform initiative aimed at creating a fairer, more transparent, and growth-friendly consumption tax system.

“The levy was initially introduced to mobilize additional revenue for Ghana’s response to the COVID-19 pandemic and to support post-pandemic recovery,” Dr. Forson told Parliament. “Its removal aligns with our efforts to streamline indirect taxes, enhance VAT compliance, and reduce the overall cost of doing business.”

The government said scrapping the levy will return over GHC3 billion to citizens, providing much-needed financial relief. While the move has been welcomed, concerns remain about how the revenue shortfall will be addressed. Dr. Forson assured lawmakers that other tax reforms would cover the gap without placing extra burdens on taxpayers.

During parliamentary discussions, Minority Leader Alexander Afenyo-Markin supported the repeal but urged the government to consider further measures. He called for the removal of other “nuisance taxes,” including the One Ghana Cedi fuel levy and the 18 percent electricity tariff, cautioning that eliminating the COVID-19 levy alone would not sufficiently reduce the financial strain on Ghanaians. He also referenced past instances where some levies were repealed only to be replaced by new ones, highlighting concerns over additional charges such as the Energy Sector Levy, formerly known as the ‘Dumsor’ levy.

The COVID-19 Health Recovery Levy was part of Ghana’s fiscal strategy to fund health services and support economic recovery in the wake of the pandemic. Its repeal marks a shift toward easing the tax burden on citizens while signaling the government’s ongoing commitment to modernizing the country’s tax system.