Government says it will abolish the COVID-19 Levy by the end of the year. This will mark the end of a tax introduced during the pandemic to support public health expenditures and economic recovery efforts. The announcement was made by Finance Minister Dr Cassiel Ato Forson during the presentation of the 2025 Budget Statement and Economic Policy on March 11.
Speaking on tax reforms, the Minister lamented the current VAT rate which is about 22%. “This is because GETFund Levy of 2.5%, National Health Insurance Levy (NHIL) of 2.5% and COVID-19 Levy of 1% are all added to the base for the final determination of the VAT rate of 15%,” he explained. He worried that the fact that businesses are “not permitted by law to claim their input for the NHIL, GETFund Levy and COVID-19 Levy, compounding the burden on households.”
Addressing Parliament, the Minister outlined what he describes as parameters for the VAT reforms
which will be completed this year. These include abolishing the COVID-19 Levy and reversing the decoupling of GETFund and NHIL
from the VAT. The others will be reducing the effective VAT rate for households and businesses, reversing the VAT flat rate regime, upwardly adjusting the VAT registration threshold to exempt micro and small businesses from the collection of VAT; and improving compliance through public education and awareness.
Meanwhile, the Finance Minister said he will be abolishing the Electronic Transaction Levy (E-levy), and the 10% tax on lottery winnings also known as the betting tax. The Minister also announced the cancellation of other levies, including the Emissions tax.
“We have programmed the following taxes for removal in line with our manifesto promises. Mr speaker, we will abolish the 10% tax on winnings from the lottery,” he said.
By: Kenneth Awotwe Darko
