Parliament Approves Abolition of COVID-19 Levy

Parliament has approved the COVID-19 Health Recovery Levy (Repeal) Bill, 2025, effectively scrapping the COVID-19 Health Recovery Levy.

The levy was introduced in 2021 under Act 1068 as part of government’s fiscal measures to mobilise additional revenue to support Ghana’s COVID-19 response and aid economic recovery in the pandemic’s aftermath.

In the 2025 Budget Statement, government announced plans to streamline the indirect tax regime and reduce the cost of doing business as part of broader efforts to stimulate growth, strengthen private sector-led recovery, and improve VAT compliance. Repealing the levy formed a key component of these reforms.

Finance Minister Dr Cassiel Ato Forson explained that the levy had outlived its original purpose, and its removal aligns with a wider VAT reform agenda aimed at creating a more transparent, equitable and growth-friendly consumption tax system. He therefore urged Parliament to approve the repeal.

Government estimates that eliminating the levy will put over GH¢3 billion back into the pockets of Ghanaians — a move that has sparked questions about how the resulting revenue shortfall will be addressed. Dr Forson, however, assured that other tax reform measures will compensate for the gap.

The Minority, meanwhile, has expressed caution. They argue that government often removes taxes publicly but quietly introduces new ones or shifts the burden through alternative means.

Minority Leader Dr Cassiel Ato Forson (CORRECT? If not, I can adjust) cited previous instances such as the Energy Sector Levy — popularly known as the ‘dumsor levy’ — and the GH¢1 fuel levy. He also referenced the recent 18% increase in electricity tariffs, insisting that the repeal of the COVID-19 levy must not be celebrated in isolation.