Government to introduce 1% Covid-19 Health Levy - Mensah Bonsu

The Caretaker Minister for Finance, Osei Kyei Mensah Bonsu says the government will be introducing a Covid-19 Health Levy of 1% on VAT, Flat Rate Scheme (VFRS), and 1% on National Health Insurance Levy (NHIL). 

“To provide the requisite resources to address these challenges and fund these activities, the government is proposing the introduction of a Covid-19 Health Levy of a one percentage point increase in the National Health Insurance Levy and a one percentage point increase in the VAT Flat Rate to support expenditures related to Covid-19,” he said.

This, he said is part of revenue measures to help the economy recover.

He said the levies will be used for the procurement of vaccines and the establishment of 14 medical waste treatment facilities.

Presenting the 2021 Budget in Parliament on Friday, March 12, 2021, he said “The levies will also assist in the construction of 33 major health projects, the recruitment of more health professionals and agenda 111”.

He said the Covid-19 pandemic has caused additional health spending that far exceeds the annual budget for health.

In another development, Mr Mensah Bonsu said the government intends to channel its energies to completing existing infrastructure projects instead of committing to new ones

He said President Akufo-Addo wants his administration to chart a new direction this year.

“Every new budget invariably contains a host of new projects to be initiated at the expense of ongoing projects. This puts pressure on our finances and also has historically resulted in arrears with many contractors not being paid on time for work done and escalating the overall cost of these projects.”