Finance Minister Dr. Cassiel Ato Forson has announced that the Covid-19 levy will be scrapped and this will put back GH₵5.7 billion in the pockets of Ghanaians and businesses.
He disclosed this while presenting the 2026 budget statement on Thursday, November 13, 2025, while also announcing that the government will implement what it calls a comprehensive overhaul of the nation’s Value Added Tax (VAT) regime.
“Mr. Speaker, by abolishing the COVID-19 levy, Government is putting GH₵3.7 billion in the pockets of individuals and businesses in 2026 alone.”
He said the decision to scrap the Covid-19 levy is designed to increase household disposable income and reduce the operating costs for businesses, which will in return support job retention and market liquidity.
“Mr. Speaker, all together, the VAT reforms is expected to give back GH₵5.7 billion to businesses and households.”
He further announced other tax reforms:
- Abolishment of the COVID-19 Health Recovery Levy: Puts GH₵3.7 billion back into the economy.
- Input Tax Deductions on Levies: The government will abolish the decoupling of the GETFund and NHIL levies from the VAT tax base, allowing businesses to claim input tax deductions on both levies. This is projected to deliver a significant reduction in operating expenses: “Mr. Speaker, these reforms will also reduce the cost of doing business by 5 percent result of subjecting the GETFund and NHIL levies to input-output deductibility.”
- Reduced Effective VAT Rate: The overall effective VAT rate will be reduced from 21.9% to 20%, providing a marginal but important reduction in the cost of goods and services.
- Raised Registration Threshold: The VAT registration threshold will be significantly raised from GH¢200,000 to GH¢750,000. This massive increase aims to formalize and bring financial relief to thousands of small and medium-sized enterprises (SMEs).
- Targeted Industry Relief: The government will abolish VAT on reconnaissance and prospecting of minerals, encouraging investment in the upstream resource sector. Furthermore, the VAT zero-rating on the supply of locally manufactured textiles will be extended to 2028, ensuring continued protection and growth for the domestic textile industry.