President John Dramani Mahama’s administration has been applauded by a majority of Ghanaians for its efforts in improving living standards and boosting the economy.

A new national tracking poll by Global InfoAnalytics, released on Monday, December 29, shows that a decline in living standards was reported by just 12% of respondents, with 5% offering no opinion.

Meanwhile, 56% of respondents reported an improvement in their standard of living over the past year, while 27% said it had not changed. Seven in ten voters believe their standard of living will improve in 2026, compared to 18% who expect no improvement.

The Mahama-led administration is yet to roll out a number of policies for next year. These policies are expected to bring relief to Ghanaians by easing economic pressures and improving daily living conditions. As part of these efforts, President John Dramani Mahama on Wednesday, December 10, officially assented to the COVID-19 Health Recovery Levy Repeal Act, 2025.

Last month, Parliament approved the government’s decision to scrap the COVID-19 Health Recovery Levy, which was introduced during the pandemic era. Introduced on March 31, 2021, under Act 1068 during the tenure of former President Nana Addo Dankwa Akufo-Addo, the levy imposed a 1% charge on the supply of goods and services in Ghana, excluding certain items, as well as on imports of goods and services.

According to the New Patriotic Party (NPP), the levy was intended to help the government raise funds to fight the pandemic and support recovery efforts.

However, presenting the 2026 Budget Statement and Economic Policy to Parliament on Thursday, November 11, Finance Minister Cassiel Ato Forson disclosed that the government had abolished the levy with immediate effect. According to him, the move will save individuals and businesses GH₵3.7 billion in taxes—money that can instead be invested back into their businesses or personal ventures.

The Finance Minister further added that after months of detailed analysis and broad consultations with stakeholders, the Ministry has completed the design of a modernised Ghana Value Added Tax (VAT) system fit for the country’s economic transformation agenda.

He mentioned that if approved by Parliament, the VAT reforms will make Ghana’s tax system more equitable, transparent, and business-friendly.

“As the new VAT reforms will do the following, we will abolish the COVID-19 Health Recovery Levy, Mr Speaker; we will abolish the decoupling of GetFund and National Insurance Levies from the VAT tax base. The current VAT rate will be reduced from 21.9% to 20%.

“In the 2025 budget, in the mid-year fiscal policy review, the government made a firm promise to reform Ghana’s Value Added Tax (VAT) system to make it fairer, simpler, and more efficient. We pledged to remove distortions, address the cascading effects inherited in the VAT system, strengthen compliance, and create a tax regime that supports both businesses and fiscal stability. These distortions have negatively impacted overall welfare, increasing the deadweight loss in the economy and reducing VAT compliance.

“Today, Mr Speaker, I am proud to report to this House that we have finally delivered on that promise. After months of detailed analysis and broad consultations with stakeholders, we have completed the design of a modernised VAT system fit for Ghana’s economic transformation agenda. Government is therefore submitting to this House today, for approval, a bold package of VAT reforms that will make our tax system more equitable, transparent, and business-friendly.

“The new VAT reforms will do the following: we will abolish the COVID-19 Health Recovery Levy. We will abolish the decoupling of GetFund and National Insurance Levies from the VAT tax base. We will abolish VAT on the recognition of minerals. We will reduce the effective VAT rate from 21.9% to 20%. We will raise the VAT registration threshold from GH₵200,000 to GH₵750,000.

“We will extend VAT zero rating on the supply of local manufacturing textiles to 2028. Mr Speaker, for emphasis, we promised to abolish the COVID Levy, and with the support of this House, I am proud to say that today, the COVID Levy is accordingly abolished. By abolishing the COVID-19 Levy, the government is putting GH₵3.7 billion in the pockets of individuals and businesses in 2026 alone,” he added.

While delivering the 2025 Mid-Year Budget Statement to Parliament on Thursday, July 24, the Finance Minister assured Ghanaians that the VAT Act was undergoing a series of reforms to eliminate successive charges that increased the cost of goods and services.

As such, the COVID-19 Levy, Ghana Education Trust Fund (GETFund), and National Health Insurance Scheme (NHIS) levies assented to by former President Akufo-Addo during the NPP-led government will be scrapped next year.

He noted that his ministry would conclude the review process by the end of September, adding that the new bill would then be submitted to Parliament in October to be included in the 2026 Budget Statement.

The development is aimed at reducing financial burdens on Ghanaians, thus improving economic conditions. The current VAT flat-rate scheme, the minister asserted, should be replaced with a unified VAT rate for all businesses.

Additionally, the VAT registration threshold will be raised, a measure expected to exempt small and micro enterprises from registering for and paying VAT, as well as encourage growth in the informal sector. To ensure compliance and transparency, the government plans to roll out fiscal electronic devices such as e-invoicing systems and electronic cash registers. Furthermore, public education campaigns and awareness programmes will be implemented.

“Rt. Hon. Speaker, the Ministry of Finance hopes to complete this process by September 2025, prepare a new VAT bill by October 2025, and submit it to Parliament as part of the 2026 Budget Statement. Mr Speaker, I would like to reassure Ghanaians that under the reforms, at a minimum, the COVID-19 levy will be abolished, the effective VAT rate will be reduced, and the punitive cascading effect of the GETFund and NHIS levies will be removed.

“VAT flat rates will be removed, and a unified VAT rate will be implemented; the VAT registration threshold will be increased to exempt small and micro businesses; and compliance will be improved through public education, awareness creation, and the introduction of fiscal electronic devices,” he said.

Earlier this year, President John Dramani Mahama’s administration repealed the betting tax, emissions tax, and other levies. The Electronic Transaction Levy (E-Levy), introduced in 2022, imposed a 1.5% tax on electronic transactions.

Although it was later reduced to 1%, the levy remained unpopular, drawing criticism from businesses, consumers, and political stakeholders who argued that it stifled digital transactions and disproportionately affected low-income earners.

The removal of the tax was a core pledge in the NDC’s manifesto, aimed at reducing the cost of living and encouraging business expansion. With the repeal bill now signed into law, many Ghanaians can breathe a sigh of relief. Supporters of the repeal argue that eliminating these levies will promote digital transactions, stimulate economic activity, and improve disposable income for households and businesses.

However, economist Dr. Adu Owusu Sarkodie has argued that the abolition of the COVID-19 Levy and removal of key taxes in the 2026 budget will create a significant revenue gap for the economy. He noted that the government is placing its hope on compliance at a time when it has already abolished the E-Levy, which previously fetched the government a little over GH¢2 billion.

He added that the betting tax, which brought in “roughly about ¢300 billion,” has also been abolished. However, the most severe hit to government revenue comes from the removal of the COVID-19 levy, which was expected to bring in about ¢3 billion next year.

“Covid-19 was giving us almost the same amount as the total royalties from oil and gas. This year, total royalties from oil and gas are estimated to be ¢2.9 billion. Covid-19 levy will be giving us ¢2.8 billion,” he stated.

He warned that removing the COVID-19 levy, on top of the ¢2 billion E-Levy, could slash government revenue by about ¢5 billion. He noted, however, that the government believes it can still raise funds by widening the tax base.

“When you increase the base, if more people are paying, it’s better than a few people paying higher rates,” Dr. Sarkodie explained.