President Akufo-Addo urges support for unpopular COVID Levy to address expenditure challenges
President Akufo-Addo urges support for unpopular COVID Levy to address expenditure challenges

President Akufo-Addo courts support for unpopular COVID Levy to address expenditure challenges

In his address tonight on updates regarding Ghana's enhanced response to the coronavirus pandemic, President Nana Addo Dankwa Akufo-Addo emphasized the significance of the COVID Health Recovery Levy in addressing the unforeseen expenses caused by the crisis.


While acknowledging that this levy may not be well-received by the public, he urged citizens to support the government and understand the necessity of this measure in bridging the financial gaps created by the pandemic.

President Akufo-Addo reassured the public that the COVID expenditures, which were primarily unplanned, underwent an audit initiated by the Auditor-General and are currently undergoing parliamentary processes. He stated, "I want to make it clear that the COVID expenditures, which were essentially unplanned, were audited by the Auditor-General at my request and are currently going through parliamentary processes. We all deserve to be reassured that the crisis was not exploited for corrupt activities."

The President acknowledged the introduction of the COVID Health Recovery Levy Act, 2021, Act 1068, as a necessary step to address the financial implications of the pandemic. 

He recognized that it might not be the most popular tax, but he appealed to the people of Ghana to comprehend the need for this levy during these challenging times. 

He stated, "The COVID Health Recovery Levy, which was implemented to help address some of the financial gaps, may not be widely favoured, but I urge all of you to be patient with us."

Additionally, President Akufo-Addo expressed his gratitude to the Covid Trust Fund, emphasizing its pivotal role in providing support during the pandemic.

According to the Ministry of Finance's fiscal data released on April 22, the government collected GH¢773.93 million in revenue from the COVID-19 Health Recovery Levy imposed last year. This amount, received between May and December, fell approximately 12.7 percent short of the GH¢889.07 million budget target. However, expenditures related to COVID-19 and its effects totaled over GH¢2.8 billion for the previous year.

According to the Ghana Revenue Authority (GRA), the COVID-19 Health Recovery Levy applies to both standard rate and value-added tax (VAT) flat rate registered individuals and businesses. This levy is calculated at a rate of one per cent on the value of taxable supplies, encompassing goods and services supplied within Ghana, with the exception of exempt items. It also extends to the import of goods and services into the country.

The implementation of this levy was announced during the presentation of the 2021 Budget in March by the then-acting Minister of Finance, Osei Kyei-Mensah-Bonsu. He emphasized that its purpose was to provide substantial support to the health sector's efficient functioning following the outbreak of the COVID-19 pandemic. Mr. Kyei-Mensah-Bonsu stated, "To address COVID-19-related expenditures, we propose a one percentage point increase in the national health insurance levy and a one percentage point increase in the VAT flat-rate." The objectives of this levy encompass various critical areas.

Firstly, the levy aims to generate additional revenue to employ a greater number of healthcare workers across the country's health facilities. It also seeks to facilitate the construction of new health facilities and the financing of nationwide deployment of COVID-19 vaccines.

Furthermore, the funds raised through this levy will support the establishment of 14 medical waste treatment facilities throughout the country. These facilities will collaborate with the private sector to ensure the safe disposal of medical waste, an essential aspect of public health management.

The GRA has said because Act 1068 did not have an end date, it will continue to collect the tax until the law is amended or repealed.

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