COVID-19 Levy to be Abolished Under VAT Reforms – Dr. Theo Acheampong
Economist and Political Analyst Dr. Theo Acheampong has clarified that the contentious COVID-19 levy will be scrapped as part of the government’s planned VAT reforms.
His comments follow media reports suggesting that the levy remains in place despite expectations of its removal.
“Just so you know, the COVID-19 levy will be taken care of/abolished as part of the VAT reforms. There shouldn’t be confusion about this—the propaganda should be quashed as soon as possible,” Dr. Acheampong stated.
He further explained that Ghana’s effective VAT rate currently stands at approximately 22% due to the cumulative impact of the 2.5% GETFund Levy, 2.5% National Health Insurance Levy (NHIL), and the 1% COVID-19 levy, which are all added to the base VAT rate.
“We need the effective VAT rate to be 15%-17% to be competitive, and also increase the registration threshold to exempt micro and small businesses from collecting VAT—collection is a big compliance issue for many small businesses,” he noted.
The clarification comes in the wake of the 2025 Budget presentation by Finance Minister Dr. Cassiel Ato Forson, in which the government announced plans to abolish several taxes.
These include the 10% withholding tax on lottery winnings (popularly known as the “Betting Tax”), the 1% Electronic Transfer Levy (E-Levy), the Emission Levy on industries and vehicles, the VAT on motor vehicle insurance policies, and the 1.5% withholding tax on the sale of unprocessed gold by small-scale miners.
Despite these tax cuts, initial reports suggested that the 1% COVID-19 levy would remain in place, contradicting previous government assurances.
However, Dr. Acheampong’s remarks indicate that its removal is tied to broader VAT reforms expected to be implemented in the coming months.
Stakeholders, particularly businesses and consumers, will be keenly watching the government’s next steps as the budget’s tax policy measures unfold.
