Finance Minister Dr Cassiel Ato Forson has reiterated that the COVID-19 Health Recovery Levy will be scrapped, fulfilling a key promise made by the National Democratic Congress (NDC).
Delivering the Mid-Year Review Budget in Parliament on Thursday, July 24, the Minister said the levy, introduced during the pandemic to support healthcare spending, is set to be abolished under a new Value Added Tax (VAT) amendment bill.
“COVID levy will be abolished,” Dr Forson stated clearly. “The effective VAT rate will be reduced,” he added, signalling a wider review of Ghana’s current VAT system.
The Finance Minister explained that the government is committed to simplifying and restructuring VAT to make it fairer and more efficient. “These reforms are aimed at addressing the distortions and cascading effect inherent in the current VAT structure,” he said.
He noted that the government had already concluded consultations with the International Monetary Fund (IMF) and is currently working with the Ghana Revenue Authority (GRA) to engage businesses and traders across the country.
“Currently, the Ghana Revenue Authority together with the Ministry of Finance is undertaking a nationwide consultation process to sensitise key players in the trade and business sector on the VAT reform and solicit feedback from them,” he told Parliament.
Dr Forson said the consultation phase would be completed by September 2025, with a draft VAT bill prepared by October for submission as part of the 2026 budget statement.
Other key measures under the proposed reforms include the removal of the VAT flat rate scheme, the elimination of the cascading impact of the GETFund and NHIS levies, and the introduction of a single unified VAT rate.
Small and micro businesses will also benefit from a raised registration threshold, and compliance will be enhanced through public education and new digital systems.
DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.
DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.
