The COVID-19 Health Recovery Levy

On 31stMarch 2021, the president assented to the Covid-19 Health Recovery Levy Act, 2021 (Act 1068). This levy will become effective 1stMay 2021.

The 2021 budget proposed a one percent (1%) Covid-19 Health Recovery Levy against the backdrop of spending emanating from the Covid-19 Pandemic.

The Covid-19 Health Recovery Levy will be a stand-alone levy applied to the gross value of taxable supplies of goods and services provided under the Standard Rate and VAT Flat Rate Schemes.

In this blog, we show you how to compute the levies. We also discuss the implications for your business. We do this by showing computations before and after introducing this levy.

Example 1: VAT Standard Rate Scheme

Company A provided professional services to Company B. The fee for services rendered by Company A is GHC 4,000.00

Items PRE






A)   Fee charged 4,000.00 4,000.00
B)    National Health Insurance Levy (2.5%*A) 100.00 100.00
C)    GET Fund Levy (2.5%*A) 100.00 100.00
D)    Covid Health Recovery Levy(1%*A) 40.00
E)    Total including levies(A+B+C+D) 4,200.00 4,240.00
F)    VAT (12.5%*E) 525.00 530.00
G)   VAT INCLUSIVE VALUE 4,725.00 4,770.00

Example 2: VAT Flat Rate Scheme (VFRS)

Emmanuel bought some goods from Merylyn Grocery. The cost of goods Emmanuel bought amounted to GHC 500.00.

Detail PRE






A)   Value of goods 500.00 500.00
B)    Covid Health Recovery Levy(1%*A) 5.00
C)    VAT (3% * A) 15.00 15.00
D)    VAT INCLUSIVE VALUE (A+B+C) 515.00 520.00


How the Law Works

This levy works just as the National Health Insurance and GET Fund Levies. You cannot deduct the Covid Levy you pay on your purchases from the Covid Levy paid to you by your customers. The levy you pay on purchases is an expense or cost to your business.

The Covid Health Recovery Levy applies to both imports and domestic supply of goods and services.

What We Expect

To make this law work, the Ghana Revenue Authority (GRA) must take a number measure such as:

  • Issue practice notes to give providing on the computation of the levy.
  • Amend the return forms to include the covid levy.
  • Redesign tax invoices to include Covid-19 Health Recovery Levy.

Impact of the Levy

This will raise the price of goods and services. Most businesses cannot fully pass on their cost, so this will hit their cash flow and profit.

Businesses will also incur additional costs to tweak their IT systems and train staff on how to process and book these taxes.

Considering that covid decimated the profits and capital of many businesses, this levy only makes their recovery difficult.

It is a regressive tax with an increasing portion of the income of low-income earners going to taxes.


This tax could hurt profits and cash flows, so it is important businesses analyze the impact, and their options for mitigating the impact of this tax on their business.

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