By: Juba Global News Network
December 10, 2025

In a move that has sparked nationwide relief and cautious optimism, President John Dramani Mahama has signed the Customs and Other Taxes (Amendment) Bill 2025, formally repealing the controversial COVID-19 Health Recovery Levy effective 1 January 2026. The 1% levy, introduced in March 2021 under the previous Nana Akufo-Addo administration, had been imposed on most goods and services to finance Ghana’s pandemic response and health infrastructure. Four years after the World Health Organization declared COVID-19 no longer a global health emergency, the levy had become a symbol of lingering economic hardship for ordinary Ghanaians and businesses alike.

The repeal fulfills a flagship campaign promise by the National Democratic Congress (NDC) during the 2024 general election and marks one of the fastest legislative actions of Mahama’s second term, just 10 days after his inauguration on 7 January 2025. It is projected to save citizens and companies an estimated GH¢3.8 billion annually, offering immediate breathing room to a nation still grappling with inflation, debt restructuring, and post-pandemic recovery.

From Emergency Measure to Permanent Burden

The COVID-19 Health Recovery Levy was introduced through the COVID-19 Health Recovery Levy Act, 2021 (Act 1068) as part of a broader GH¢100 billion Ghana CARES “Obaatan Pa” programme. Originally pitched as a temporary measure, it was layered on top of the existing 2.5% National Health Insurance Levy (NHIL) and 2.5% Ghana Education Trust Fund (GETFund) levy, effectively creating a cumulative 6% tax burden on most transactions.

By 2024, the levy had generated more than GH¢8.2 billion, according to Finance Ministry data. While some funds were channeled into vaccine procurement, oxygen plants, and hospital upgrades, critics, including the Ghana Union of Traders’ Associations (GUTA) and the Institute of Economic Affairs, argued that transparency was lacking and that the tax had simply become another revenue tool long after the emergency ended.

Businesses, particularly in retail, hospitality, and manufacturing, complained that the levy increased input costs, reduced competitiveness, and fueled inflation at a time when the cedi was depreciating rapidly. Consumers felt it most at the pump and in the marketplace: every litre of fuel carried an additional 20 pesewas, and every bank transaction, restaurant bill, or mobile-money transfer was hit.

A Campaign Promise Delivered in Record Time

During the 2024 campaign, John Mahama repeatedly described the levy as “a tax too far” and vowed to abolish it within the first 100 days of his administration. After the NDC’s decisive victory, the new Parliament, now dominated by NDC lawmakers, fast-tracked the Customs and Other Taxes (Amendment) Bill. Introduced on 19 February 2025, it passed third reading on 5 March and received presidential assent on 7 March, an unusually swift legislative journey by Ghanaian standards.

Finance Minister Dr. Cassiel Ato Forson told Parliament the repeal would “put more money in the pockets of Ghanaians and make Ghanaian businesses more competitive.” He stressed that health sector funding would now come from more sustainable sources, including increased allocations from the national budget and the ongoing e-levy adjustments.

Immediate Winners and Cautious Optimism

The repeal is expected to benefit virtually every sector:

• Consumers: Lower prices on fuel, electricity, water, mobile money transactions, and imported goods. The Ghana Statistical Service estimates an immediate 0.6–0.9% reduction in headline inflation once the repeal takes effect.
• Businesses: GUTA President Dr. Joseph Obeng hailed the move as “oxygen for the private sector,” predicting a revival in retail and hospitality, sectors that have struggled since 2020.
• Transport and Logistics: Trotro and taxi fares, which had incorporated the levy into cost calculations, are expected to drop marginally.
• Digital Economy: Mobile-money merchants and fintech companies anticipate higher transaction volumes as the 1% bite disappears.

Economist Professor Godfred Bokpin of the University of Ghana described the repeal as “politically popular and economically sensible,” but cautioned that the GH¢3.8 billion revenue hole must be plugged responsibly to avoid cuts in critical health expenditure.

Fiscal Implications and the Road Ahead

The Ministry of Finance has already outlined compensatory measures:

• A revised e-levy rate (reduced from 1.5% to 1.0% in the 2025 budget)
• Improved domestic revenue mobilisation through digitalisation
• Increased budgetary allocation to the Ministry of Health from 2026

Health Minister Dr. Bernard Okoe Boye has assured Ghanaians that flagship programmes such as Agenda 111 hospitals and the National Vaccine Institute will not be affected. “The era of taxing sickness is over,” he declared at a press conference in Accra.

A Symbolic New Beginning

For many Ghanaians, the repeal is more than an economic measure; it is a psychological turning of the page. The COVID-19 pandemic claimed over 1,400 lives in Ghana and shattered countless livelihoods. The levy, though initially accepted as a necessary sacrifice, had come to represent prolonged hardship.

As President Mahama said during the signing ceremony at Jubilee House:
“We promised to remove burdens, not to add them. Starting January 1, 2026, Ghanaians will begin the new year with one less tax weighing them down.”

As the countdown to 2026 begins, markets in Kumasi, taxis in Accra, and households across the country are already calculating the savings. For a nation hungry for good news, the repeal of the COVID-19 Health Recovery Levy is exactly that: a concrete, pocket-friendly reminder that change, when delivered swiftly and decisively, is still possible.

© JubaGlobal.com – Telling Africa’s stories with clarity and courage.

Sharing is caring!