Government reveals plans for major VAT reforms, including elimination of COVID tax.

The government has announced it will completely scrap the COVID-19 Health Recovery Levy as part of a broader plan to overhaul Ghana’s Value Added Tax (VAT) system.

Finance Minister, Dr. Cassiel Ato Forson made the disclosure in Parliament on Thursday, July 24, during the presentation of the 2025 Mid-Year Budget Review. The decision is aimed at easing the financial pressure on consumers and reducing tax compliance burdens on small businesses.

“We are committed to easing the burden on consumers and businesses alike,” Dr. Forson told MPs, adding that the VAT Amendment Bill will eliminate long-standing inefficiencies in the system.

Among the key reforms is the removal of cumulative VAT charges resulting from levies like GETFund and NHIS, which currently inflate the effective tax rate. The VAT Flat Rate Scheme, often criticised for complicating compliance will also be abolished as communicated by the finance minister.

Dr. Forson said the government plans to raise the VAT registration threshold, a move expected to exempt more micro and small-scale traders from VAT obligations and reduce compliance stress in the informal sector.

According to the minister, stakeholder consultations have already begun between the Ministry of Finance, the Ghana Revenue Authority and various interest groups across the country. The final bill is expected to be laid before Parliament in October as part of the 2026 Budget.

The government also plans to roll out fiscal electronic devices and step up public education to improve compliance, tackle tax evasion, and grow revenue without increasing the burden on citizens.