Ghana’s Finance Minister, Dr. Cassiel Ato Forson, has announced the abolition of the COVID-19 Health Recovery Levy, a move expected to return GH¢3.7 billion to the pockets of individuals and businesses in 2026.

Delivering the 2026 Budget and Economic Policy to Parliament on Thursday, November 13, 2025, Dr. Forson said the government was committed to easing the tax burden on Ghanaians while building a fair and efficient revenue system that promotes growth.

“Mr Speaker, the COVID-19 levy is hereby abolished,” he declared to resounding applause in Parliament.

“By abolishing the COVID-19 levy, Government is putting GH¢3.7 billion in the pockets of individuals and businesses in 2026 alone,” he added.

The removal of the COVID-19 levy forms part of a comprehensive Value Added Tax (VAT) reform package that the government says will make Ghana’s tax system simpler, fairer, and more business-friendly.

Major VAT Reforms Announced

In addition to scrapping the COVID-19 levy, Dr. Forson outlined a bold suite of VAT reforms that aim to remove distortions, improve compliance, and support small and medium enterprises (SMEs).

Key measures include:

• Reducing the effective VAT rate from 21.9% to 20%.
• Abolishing the decoupling of GETFund and NHIL levies from the VAT base, allowing both to qualify for input tax deductions.
• Abolishing VAT on mineral reconnaissance and prospecting.
• Raising the VAT registration threshold from GH¢200,000 to GH¢750,000.
• Extending the zero-rating on locally manufactured textiles to 2028.

The combined effect of these measures, according to the Minister, will return GH¢5.7 billion in savings to businesses and households, while reducing the cost of doing business by about 5%.

“These reforms will make Ghana’s tax regime more equitable, transparent, and supportive of private sector growth,” Dr. Forson explained.

Supporting Small and Micro Businesses

Dr. Forson noted that the existing VAT registration threshold of GH¢200,000, set in 2015, has depreciated in real terms to about GH¢48,000 due to inflation, pushing thousands of small enterprises into a tax net they were not originally meant to be part of.

“This has placed an undue burden on small and micro businesses and increased the cost of administering VAT,” he said. “Raising the threshold to GH¢750,000 will exempt more small traders and make VAT administration simpler and fairer.”

The Finance Minister emphasized that the government’s approach was not merely to collect taxes but to create a conducive business environment where compliance becomes easier and growth more sustainable.

Boosting Investment and Job Creation

The abolition of VAT on mineral exploration and reconnaissance, Dr. Forson said, was a strategic move to revive investor confidence in Ghana’s mining sector.

“Over the past two decades, VAT on mineral exploration has discouraged new investments. By removing it, we will stimulate greenfield activity, attract investors, and ensure responsible mining that protects our environment,” he stated.

The government also extended VAT zero-rating on locally produced textiles to December 2028, a policy expected to safeguard over 2,000 direct jobs in the textile and garment industry.

“We are resolute in supporting the domestic textile industry, which has demonstrated the capacity to expand when given the right fiscal incentives,” Dr. Forson said.

Digital Tools to Strengthen VAT Compliance

To enhance tax administration, the government plans to deploy electronic and digital solutions to improve VAT compliance and monitoring.

These include:

• Digital tracking of cross-border transactions on non-resident online platforms.
• Deployment of Fiscal Electronic Devices (FEDs) to monitor taxable transactions in real-time.
• Introduction of a VAT Reward Scheme, where citizens can earn benefits by submitting VAT receipts, a measure designed to encourage public participation in tax compliance.

Dr. Forson described these reforms as “a turning point in Ghana’s tax administration,” signaling a new era of digital transparency and revenue efficiency.

A Fairer, Simpler, Business-Friendly Tax Regime

In conclusion, the Finance Minister underscored that the 2026 VAT reform package, coupled with the abolition of the COVID-19 levy, demonstrates government’s resolve to lighten the tax load while maintaining fiscal discipline.

“This is not just a tax reform,” he said. “It is a step toward a more just, predictable, and business-friendly economy. It honours our pledge to lighten the load on honest taxpayers while building a stronger foundation for national development.”

The Ghana Revenue Authority (GRA) is expected to embark on a nationwide public education campaign to ensure smooth implementation of the new VAT system in early 2026.

With these sweeping changes, Ghana’s 2026 Budget positions itself as a landmark in tax modernization, business relief, and inclusive economic recovery, fulfilling President John Mahama’s vision of “Resetting for Growth, Jobs, and Economic Transformation.”