Finance Minister Dr. Cassiel Ato Forson has announced the abolition of the COVID-19 Health Recovery Levy as part of a sweeping VAT reform package unveiled during the presentation of the 2026 Budget Statement in Parliament on Thursday, November 13, 2025.
“Today, I am proud to report that we have delivered on that promise. After months of detailed analysis and broad consultations with stakeholders, we have completed the design of a modernized VAT system fit for Ghana’s economic transformation agenda,” Dr. Forson declared.
He informed the House that the government is submitting a comprehensive VAT reform bill for approval, aimed at creating a more equitable, transparent, and business-friendly tax regime.
Under the proposed reforms, the COVID-19 Health Recovery Levy will be completely abolished, putting GH¢3.7 billion back into the pockets of individuals and businesses in 2026 alone.
The decoupling of the GETFund and National Health Insurance Levy (NHIL) from the VAT tax base will also be scrapped, allowing both levies to qualify for input tax deductions.
According to the Minister, this change will reduce the cost of doing business by 5 percent through improved input-output deductibility.
VAT on reconnaissance and prospecting of minerals will be eliminated to encourage investment in the mining sector, while the effective VAT rate will be lowered from 21.9% to 20%, easing the overall tax burden on consumers and enterprises.
In a boost for small businesses, the VAT registration threshold will be raised from GH¢200,000 to GH¢750,000, enabling more micro and small enterprises to operate below the VAT net and focus on growth.
Additionally, the zero-rating of VAT on locally manufactured textiles, originally set to expire, will be extended to 2028, providing sustained support to Ghana’s textile industry and promoting local production.
Dr. Forson described the package as a strategic move to stimulate economic activity, enhance competitiveness, and deliver meaningful tax relief in line with the government’s recovery and transformation agenda.
The VAT Amendment Bill is expected to be tabled before Parliament for debate and passage before the end of the 2025 legislative session.