Government has announced the introduction of a COVID-19 levy to cater for the increasing state expenditure brought on by the coronavirus pandemic.

The newly proposed levy will be a one percentage point increase on both the existing VAT Flat Rate Scheme (VFRS) and National Health Insurance Levy (NHIL).

Caretaker Minister for Finance, Osei Kyei-Mensah-Bonsu disclosed this in Parliament today, March 12, 2021, during the presentation of the government’s budget for the financial year ending December 31, 2021.

Monies accrued from the imposition of the levy will go into the construction of health infrastructure, recruitment of more health personnel, vaccination programme and address other challenges in a bid to manage the COVID-19 outbreak in the country.

“To provide the requisite resources to address these challenges and fund these activities, the government is proposing the introduction of a COVID-19 Health Levy of a one percentage point increase in the National Health Insurance Levy and a one percentage point increase in the VAT Flat Rate to support expenditures related to COVID-19,” Mr. Kyei-Mensah-Bonsu disclosed.

The Minister admitted that expenditure on health infrastructure and health-related items such as vaccines, hospital supplies and Personal Protective Equipment (PPE) would become routine.

However, the government “will take measures to ensure that these additional critical expenditures do not undermine our fiscal consolidation and debt sustainability.”

COVID-19 investments
Government has indicated that it in talks with private investors for the establishment of 14 treatment centres nationwide for the proper disposal of medical waste in the country.

The move has been necessitated by the COVID-19 pandemic and its attendant vaccination exercise currently ongoing in Ghana.

Also, it has outdoored “Agenda 111” with the aim to design, build, equip and staff new hospitals in every district without one, and a new regional hospital in every region with none.

The project which is yet to see some groundwork was to see to the construction of a 100-bed hospital in 88 districts that currently lack such facilities as well as regional hospitals in each of the six new regions.

More so, the Effia-Nkwanta Regional Hospital in the Western Region was to be rehabilitated, plus two new psychiatric hospitals as well as infectious disease centres for each of the three ecological zones.

The Parliamentary Affairs Minister also disclosed that the levy “will also assist in the construction of 33 major health projects, the recruitment of more health professionals and Agenda 111.”

He also announced the imposition of what he described as Sanitation and Pollution Levy to help address sanitation challenges in the country.

“To provide the requisite resources to address these challenges and fund these activities, the government is proposing a Sanitation and Pollution Levy (SPL) of 10 pesewas on the price per litre of petrol/diesel under the Energy Sector Levies Act (ESLA),” he added.