Government Eliminates COVID-19 Health Recovery Levy as Part of Major Tax Reforms
The government has taken a significant step in its ongoing efforts to ease the financial burden on citizens and stimulate economic growth by abolishing the COVID-19 Health Recovery Levy. This decision is part of a broader set of tax reforms outlined in the 2026 Budget Statement and Economic Policy, which was presented to Parliament on Thursday, 13 November 2026.
Finance Minister Cassiel Ato Forson announced the move during his address, highlighting it as one of the most impactful measures in the new fiscal plan. According to the minister, the abolition of the levy will return approximately GHC3.7 billion to individuals and businesses in 2026 alone.
“Mr Speaker, by abolishing the COVID-19 levy, the Government is putting GHC3.7 billion in the pockets of individuals and businesses in 2026,” Dr. Forson stated during the presentation.
This initiative is part of a larger package of Value Added Tax (VAT) reforms that are expected to provide GHC5.7 billion in relief to the private sector and consumers. The comprehensive changes aim to simplify Ghana’s tax structure, reduce the cost of doing business, and enhance the competitiveness of local enterprises.
Key Components of the Tax Reform Package
Dr. Forson explained that the government will now allow businesses to claim input tax deductions on the GETFund and NHIL levies. This policy is expected to lower operating costs by about five percent. Additionally, the effective VAT rate will decrease from 21.9% to 20%, making it more favorable for businesses and consumers alike.
Another important aspect of the reform is the increase in the VAT registration threshold, which will rise from GHC200,000 to GHC750,000. This change is intended to alleviate pressure on small and medium-sized enterprises, allowing them to operate more efficiently without the burden of excessive taxation.
Furthermore, the Finance Minister announced that VAT on reconnaissance and prospecting of minerals will be abolished. This move is aimed at encouraging upstream investment in the mining sector. In addition, the VAT zero-rating on locally manufactured textiles will be extended until 2028, providing continued support to the domestic textile industry.
Commitment to Economic Resilience
Dr. Forson emphasized that these reforms reflect the government’s commitment to strengthening economic resilience and fostering sustainable growth after years of fiscal consolidation. He described the changes as a step toward creating a fairer and more growth-oriented tax system.
“Mr Speaker, these reforms are designed to make our tax system fairer and more growth-oriented,” he said.
The announcement has been widely welcomed by business leaders and economic analysts, who see it as a positive development for the country’s economic landscape. The reforms are expected to contribute to increased investment, job creation, and overall economic stability.