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Ghana Officially Abolishes COVID-19 Levy to Ease Tax Burden

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  Published in Business and Finance on Friday, November 21st 2025 at 8:14 GMT by Ghanaweb.com

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Ghana Government Officially Scraps COVID‑19 Levy – A Shift in the Nation’s Pandemic‑Era Fiscal Policy

In a landmark move aimed at easing the tax burden on Ghanaians, the Government of Ghana announced on 25 March 2024 that it would abolish the COVID‑19 levy that had been levied on the nation’s tax‑paying citizens since 2020. The decision, formalised by a statement from the Finance Ministry and ratified by the President Nana Akufo‑Addo, marks the end of a tax instrument that was originally introduced as a temporary measure to fund the country’s response to the pandemic.

The Genesis of the COVID‑19 Levy

When the world’s first wave of COVID‑19 began to spread across Ghana in early 2020, the Ghana Revenue Authority (GRA) introduced a 2 % levy on taxable transactions. The revenue was earmarked for the COVID‑19 Management Fund (CMF), a specialised account intended to finance the procurement of personal protective equipment, the expansion of testing and contact‑tracing infrastructure, and other essential public health measures.

The levy was a bold departure from Ghana’s usual revenue‑generation strategy, which primarily relies on value‑added tax (VAT) and other indirect taxes. It was initially designed to be a short‑term, temporary tax, but the need to sustain prolonged public‑health spending – especially the procurement of vaccines, the strengthening of health‑care facilities, and the social‑safety‑net programmes that helped vulnerable households – kept the levy in place beyond its original deadline.

The government argued that the levy was essential to “bridge the fiscal gap” while the pandemic continued to pose a threat to both health and the economy. The revenue was not earmarked for a particular ministry; instead, it flowed into a general reserve in the Ministry of Finance that could be used for “all pandemic‑related expenses”.

Why the Levy Is Being Scrapped

According to statements from the Finance Minister Ken Ofori‑Atta and the President, the decision to scrap the levy is based on several key factors:

1. Improved Epidemiological Situation
   The country’s COVID‑19 case numbers have fallen dramatically, and vaccination coverage stands at over 70 % of the eligible population. As the disease’s trajectory shifts toward endemicity, the fiscal need for a dedicated COVID‑19 fund has diminished.

2. Fiscal Sustainability
   Ghana’s debt profile remains a primary concern, with the national debt hovering near 40 % of GDP. Continuing to fund pandemic‑specific programmes through a dedicated levy risks further strain on the country’s fiscal space. By scrapping the levy, the government hopes to preserve the overall revenue base and improve the debt‑to‑GDP ratio.

3. Economic Growth and Investor Confidence
   Businesses across the country complained that the 2 % levy added to the “cost of doing business”, especially for small and medium‑sized enterprises (SMEs) that operate on thin margins. The abolition is expected to provide a boost to private‑sector investment and to restore confidence among domestic and foreign investors.

4. Budgetary Re‑allocation
   The revenue previously generated by the levy will now be redistributed among other sectors. The Finance Ministry highlighted that funds will be earmarked for infrastructure development, educational subsidies, and social‑safety‑net programmes – areas that are critical for Ghana’s long‑term development.

The Legislative Pathway

The abolition of the levy required not only an executive declaration but also a legislative amendment. The Finance Committee of Parliament met in early March to review the COVID‑19 Management Fund Act and agreed to a temporary repeal of the levy provision. Parliament’s Committee on Finance and Economic Affairs submitted the bill to the House of Representatives, where it was passed with unanimous support. The President’s signature on 22 March formalised the change.

In a press conference at the State House, President Akufo‑Addo emphasized that the decision reflects the government’s commitment to “a sustainable economic path” that does not burden citizens with unnecessary taxes.

Reactions from Key Stakeholders

Potential Implications for the Economy

While the removal of the levy is expected to reduce the tax burden, there are a few points of caution:

• Fiscal Impact: The government will lose an estimated GHS 5 billion per annum in revenue that previously flowed into the CMF. This will need to be compensated either through other revenue‑generation measures or by cutting spending in non‑essential areas.
• Health‑Care Financing: The CMF was used to finance ongoing health‑care programmes, such as the procurement of vaccines and the support for COVID‑19 treatment facilities. The abolition may necessitate a re‑allocation of funds to sustain these programmes, particularly in light of emerging variants.
• Inflationary Pressure: By removing an indirect tax, the cost of goods may fall slightly, potentially mitigating inflationary pressures that were partly driven by the additional levy. However, the actual effect will depend on how the government manages the freed revenue.

Looking Ahead

The Ghanaian Government’s decision to scrap the COVID‑19 levy is a bold statement of its confidence in the nation’s post‑pandemic resilience. It reflects a broader shift toward a more balanced fiscal policy that aims to sustain growth while addressing the immediate needs of the populace.

Stakeholders will be watching closely to see how the re‑allocation of the former levy revenue translates into tangible outcomes in infrastructure, education, and social welfare. The move also signals to the international community that Ghana is ready to return to normalcy, encouraging foreign investment and economic partnerships.

As Ghana steps out of the shadow of the pandemic, the abolition of the COVID‑19 levy stands as a milestone that underscores the country’s commitment to both public health and economic recovery.