Parliament repeals COVID-19 Recovery Act

Parliament has passed the COVID-19 Health Recovery Levy (Repeal) Bill, 2025.

The bill, when assented to by the President, will repeal the COVID-19 Recovery Act, 2021 (Act 1069), which imposed a one per cent levy on the supply of goods and services made in the country, as well as imports.

The levy was aimed at raising revenue to support COVID-19 expenditures and to provide for related matters.

It was introduced as part of fiscal measures to mobilise additional revenue to support the country’s response to the COVID-19 pandemic and to facilitate economic recovery in the aftermath of the global health crisis.

In order to achieve that, Act 1068 imposed a one per cent levy on the supply of goods and services made in the country, other than exempt goods or services, and on the import of goods and services, other than exempt imports.

The levy was not allowable as an input tax deduction, effectively and adversely increasing the tax burden on businesses and households.

The repeal, which had the overwhelming support of both sides of the House, was to fulfil a promise President Mahama made to Ghanaians.

In the 2026 Budget Statement, the government announced its commitment to streamline the indirect tax regime and to reduce the overall cost of doing business as part of broader efforts to stimulate growth, support private sector-led recovery and improve compliance in the Value Added Tax (VAT) system.

One of such reforms was to repeal Act 1068.

The Minister of Finance, Dr Cassiel Ato Forson, explained that the COVID-19 Health Recovery Levy Act, 2021, had outlived its original purpose.

The repeal was, therefore, a part of the comprehensive VAT reform agenda aimed at creating a more transparent, equitable and growth-friendly consumption tax system, he said.

He, therefore, called on Parliament to approve the Bill and repeal Act 1068.

Fiscal impact

Moving the motion for the House to adopt the Finance Committee’s report and approve the bill last Tuesday, the Chairman of the committee, Isaac Adongo, said the repeal of the COVID-19 Health Recovery Levy Act, 2021 (Act 1068) would lead to a revenue loss of GH¢3 billion.

He, however, said the Finance Minister had assured the committee that, with the current tax reforms ongoing, it was expected that the measures would result in an increase in business activities in the country and thereby lead to an increase in tax revenue. 

Inconsistent government

Contributing to the motion for the House to repeal the bill, the Minority Leader, Alexander Afenyo-Markin, accused the government of inconsistent actions.

He said the bill sought to create the impression that the current government was a listening government and wanted to lessen the tax burden on the ordinary Ghanaian.

The reality, he said, was that just last week, the government came to the House with 20 per cent tax exemptions that led to $10.4 million granted to a foreign company.

He said the government had created the impression that the previous government had a certain agreement, and “so they are only following through”.

“But you said you are a reset government, and so if, indeed, there was anything bad, cancel it,” he said.

Mr Afenyo-Markin said this year alone, the ordinary Ghanaian who used electricity had been burdened with a total of 18.4 per cent upward adjustment of electricity tariffs alone.

“Mr Speaker, in 2018, the Akufo-Addo government, through the PURC (Public Utilities Regulatory Commission), announced a reduced tariff adjustment, ranging from 18 per cent for households and 30 per cent (for) corporate (bodies).

“When you came into office this year, you have increased electricity tariffs up to 18.4 per cent, and if you care about the ordinary Ghanaian, why did you impose the tariffs?” he said.

“A government must be principled and consistent. You imposed 18 per cent tariff and you grant $10.4 million in tax exemption, forgetting that when you were in opposition, you stood against tax exemptions for Ghanaian businessmen who were coming into the country to invest in One-District-One-Factory,” he said.

Spare parts dealers disappointed

Mr Afenyo-Markin added that if the government was minded to, indeed, relieve the ordinary Ghanaian of the everyday hazard, it should demonstrate that by immediately repealing the levy on diesel and petrol.

“If you do that, then we will take you seriously, and they should immediately reverse their 18 per cent tariffs that have been imposed on electricity, he said.

The Minority Leader added that the government had promised automobile spare parts dealers that it would take away taxes on the importation of spare parts.  

“In your 2026 Budget, you said nothing about it, and the Abossey Okai Spare Parts Dealers have been disappointed by you,” he said.