IMF endorses plan to scrap COVID levy

The International Monetary Fund (IMF) has thrown its support behind Ghana’s planned abolition of the COVID-19 Health Recovery Levy, reinforcing growing confidence in the government’s ongoing tax reforms aimed at easing the burden on businesses and enhancing revenue mobilization.

Finance Minister Dr. Cassiel Ato Forson is expected to officially announce the removal of the 1 percent levy when he presents the 2025 Mid-Year Budget Review to Parliament on Thursday, July 24.

The levy was introduced in 2021 to help finance health interventions and economic recovery programs in the wake of the COVID-19 pandemic.

Commissioner of the Domestic Tax Revenue Division at the Ghana Revenue Authority (GRA), Edward Apenteng Gyamera, confirmed that the proposal to scrap the levy had received broad-based consensus from stakeholders, including the IMF.

“I think from the engagements with stakeholders and the IMF, issues that the Minister even indicated in the budget for instance, the removal of the COVID levy is something that has been agreed. So far, our interactions show that everybody is of the view that this levy should be taken off when the reform is completed,” Mr. Gyamera stated in an interview.

The COVID-19 Health Recovery Levy, introduced under Act 1068, imposed a 1 percent charge on the supply of goods, services, and imports. While it served as a temporary measure to boost government finances during the pandemic, calls for its removal have grown, particularly from the business community, which has long complained about tax overload and compliance challenges.

In addition to scrapping the levy, the government is advancing proposals to consolidate certain taxes into the Value Added Tax (VAT) structure. This approach is expected to reduce cascading tax effects and allow businesses to claim input deductions, thereby improving the overall investment climate.

“Treating the levies as part of the VAT mechanism, where businesses can claim input and deductions, has been generally accepted by all. The business community broadly supports the reforms as critical interventions to ease compliance pressures and attract investment,” Mr. Gyamera noted.

These reforms are central to Ghana’s medium-term revenue strategy, which forms a core component of the IMF-supported Post-COVID Programme for Economic Growth (PC-PEG). The program seeks to restore macroeconomic stability, strengthen public finances, and promote sustainable growth.