By Grace Zigah
In a significant policy betrayal, Finance Minister Dr. Cassiel Ato Forson has announced that the intended review of the COVID-19 levy during the 2025 mid-year budget statement has been pushed to 2026.
According to him, the review will be part of sweeping reforms to Ghana’s Value Added Tax (VAT) regime, including the planned abolition of the COVID-19 and National Health Insurance Scheme (NHIS) levies by 2026.
The government had pledged to scrap the COVID-19 levy along with betting tax and E-Levy during its first budget statement in March but moved the scrapping of the COVID-19 which it described as nuisance tax to July.
But now it says next year.
The announcement was made during the presentation of the 2025 Mid-Year Budget Review in Parliament on Thursday, July 24.
The reforms form part of the broader fiscal and economic restructuring strategy of the John Mahama-led administration, which took office in January 2025 amid promises to stabilize the economy and reduce the cost of living.
According to Forson, the government is committed to finalizing the VAT reforms by October 2025 and submitting the necessary legislative changes as part of the 2026 Budget Statement.
“I would like to reassure Ghanaians that the COVID-19 Levy will be abolished, the Effective VAT Flat Rate will be reduced, the punitive and cascading effects of the NHIS Levy will be removed, and GETFund will be removed,” Dr. Forson stated.
“VAT Flat Rate will be eliminated and replaced with a unified VAT Rate.”
These changes are designed to remove distortions in the current VAT structure that critics say have made the system overly complex and regressive.
The NHIS and COVID-19 levies have long been controversial, with small businesses and consumers frequently complaining about the additional financial strain they impose.
The COVID-19 levy, introduced in 2021 by the previous administration to raise funds for pandemic-related expenditures, currently imposes an additional 1% charge on VAT-taxable goods and services.
The NHIS levy, which supports Ghana’s national health insurance program, adds a further 2.5% on VAT.
Both have been described by tax analysts as “cascading” taxes that increase the final price of goods and services disproportionately.
Dr. Forson emphasized that the proposed VAT reforms are part of a larger economic vision centered on fairness, transparency, and growth.
“These efforts—together with measures to diversify the economy—are critical to restoring macroeconomic stability, rebuilding confidence, and easing financial pressure on ordinary citizens,” he told Parliament.
The Finance Minister said the reforms will also support efforts to improve domestic revenue mobilization, strengthen public financial management systems, and reinforce the monetary policy framework.
The proposed changes, he explained, are necessary to make Ghana’s tax system more equitable, efficient, and investment-friendly.
A new VAT Bill encapsulating the proposed changes will be drafted and laid before Parliament as part of the 2026 national budget.
This approach gives stakeholders—including businesses, tax professionals, and civil society—ample time to contribute to consultations on the final structure of the tax code.
The tax policy reforms come as the government also claims to have added $2.14 billion to the country’s foreign reserves without external borrowing—a claim that further underscores the administration’s strategy to stabilize Ghana’s economy through internal resource mobilization and prudent fiscal management.
