2026 Budget: Government Abolishes COVID-19 Levy- ato forson declares
Accra, Ghana —Ghana’s Finance Minister, Dr. Cassiel Ato Forson, has announced a sweeping overhaul of the country’s tax system as part of the 2026 Budget, highlighted by the complete abolition of the COVID-19 Health Recovery Levy. The announcement marks one of the most significant tax policy shifts since the pandemic era.
Addressing Parliament on Thursday, Dr. Forson said the removal of the levy introduced during COVID-19 to rebuild fiscal buffers will return GHS 3.7 billion directly to individuals and businesses in 2026. “Mr. Speaker, by abolishing the COVID-19 levy, the government is putting 3.7 billion Ghana cedis back in the pockets of individuals and businesses next year.”
The Minister framed the reform as part of the government’s commitment to easing the cost of living, supporting private-sector growth, and modernizing Ghana’s tax architecture. As part of a broader modernization drive, the Finance Minister announced a comprehensive restructuring of Ghana’s Value Added Tax (VAT) system. The reforms aim to make VAT simpler, fairer, and more business-friendly.
Dr. Forson said the reforms followed “months of detailed analysis and broad consultations with stakeholders. Key VAT reforms for the year 2026 includes the Abolition of the COVID-19 Health Recovery Levy, Abolition of VAT on mineral reconnaissance and prospecting, Abolition of the decoupling of GETFund and NHIL from the VAT base, Reduction of the effective VAT rate from 21.9% to 20%, Increase in VAT registration threshold from GHS 200,000 to GHS 750,000 and finally the Extension of zero-rated VAT status for local manufacturing until 2028.
According to the Minister, these changes will reduce the cost of doing business by 5%, improve compliance, and eliminate longstanding distortions in Ghana’s tax system. Despite the tax cuts, government expects stronger domestic revenue performance in 2026 projecting non-oil revenue to rise from 15.1% of GDP in 2025 to 15.7% in 2026, thanks to improved compliance and a more efficient tax structure.
The reforms, the Minister noted, are part of the medium-term strategy to stabilize the economy, sustain the decline in inflation, and support Ghana’s emerging recovery.
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