Mahama officially abolishes Covid-levy

President John Dramani Mahama has given official endorsement to the repeal of the COVID-19 Health Recovery Levy Act, 2025, effectively terminating the one percent tax imposed on goods, services, and imports during the peak of the COVID-19 pandemic.

This decision, formalized on Wednesday, December 10, paves the way for the levy’s full removal starting January 2026.

The levy, first introduced in 2021 through Act 1068, was designed to aid the government in managing expenditures related to the pandemic, including strengthening health systems, covering COVID-19 costs, and restoring fiscal stability.

It applied a 1% charge on most taxable goods, services, and imports, except those already exempt under VAT laws.

Parliament had approved the repeal last month by passing the COVID-19 Health Recovery Levy (Repeal) Bill, 2025. This move is part of a broader government initiative to eliminate what it considers nuisance taxes and to reduce living costs for both households and businesses.

The Finance Committee, chaired by Mr. Isaac Adongo, highlighted that this repeal aligns with ongoing VAT reforms aimed at fostering a more transparent, fair, and growth-driven tax environment.

While the repeal will result in a revenue shortfall estimated at GH¢3 billion, Finance Minister Dr. Cassiel Ato Baah Forson assured legislators that the government’s tax reform measures will stimulate economic activity, eventually boosting revenue streams.

During parliamentary debates, Minority Leader Alexander Kwamena Afenyo-Markin expressed concern over new levies like the Energy Sector Levy and rising electricity tariffs, which he argued place heavy financial burdens on ordinary Ghanaians.

He also criticized the approval of a USD 10 million tax waiver granted to Tata Consultancy Services Limited for the Integrated Tax Administration System project.

In defense, Mr. Adongo emphasized that repealing a tax meant for combating a health crisis, which has since ended, serves the best interests of citizens. He pointed out that the government has already collected GH¢3 billion annually from this levy over the past four years.

The tax waiver was explained as a continuation of agreements from previous administrations linked to the IMF programme.