Government to scrap COVID levy, review VAT to ease pressure on small businesses—Dr Ato Forson

Ghanaians could see changes in pricing and tax compliance as the government outlines plans to overhaul the country’s Value Added Tax (VAT) system.

Finance Minister Dr Cassiel Ato Forson told Parliament on Thursday, July 24, 2025, during the presentation of the Mid-Year Budget Review, that the proposed reforms aim to simplify the current structure and ease the burden on consumers and small businesses.

Dr Forson announced that the COVID-19 Health Recovery Levy would be abolished entirely.

He also said the effective VAT rate would be lowered through the removal of cascading charges caused by additional levies such as the GETFund and NHIS.

The VAT Flat Rate Scheme, which has been criticised for compounding compliance difficulties, will also be discontinued.

“We are committed to easing the burden on consumers and businesses alike,” Dr Forson told the House.

“Our VAT Amendment Bill will address the distortions and inefficiencies that have plagued the current system.”

The minister said small and micro businesses would also benefit from the changes. The VAT registration threshold is to be raised, exempting more small traders from the tax net.

According to Dr Forson, this measure is intended to support growth in the informal sector while reducing compliance pressure.

"Consultations on the reforms have already begun, with the Ghana Revenue Authority and the Ministry of Finance engaging stakeholders across the country," he stated

The government is expected to table the final bill before Parliament in October as part of the 2026 Budget Statement.

Dr Forson said the reforms are also aimed at improving tax transparency and fairness.

He announced plans to roll out fiscal electronic devices and intensify public education to improve compliance, reduce evasion, and increase revenue without placing additional pressure on consumers.