Ghana to Abolish Six Controversial Taxes in 2025 Budget

Ghana’s Finance Minister, Dr. Cassiel Ato Forson, has announced the abolition of six controversial taxes, including the Betting Tax, E-Levy, and VAT on Motor Vehicle Insurance Policies, aligning with the NDC’s 2024 manifesto. This decision aims to ease financial burdens on citizens, promote business growth, and enhance compliance while implementing measures to manage revenue losses.

In a decisive move, Ghana’s Finance Minister, Dr. Cassiel Ato Forson, has declared that the government will abolish six contentious taxes to alleviate financial burdens on citizens. This decision aligns with the National Democratic Congress (NDC)’s promise in their 2024 manifesto to eliminate these so-called “nuisance” levies. The taxes set for removal include the Betting Tax, E-Levy, Emission Levy, VAT on Motor Vehicle Insurance Policies, Tax on Unprocessed Gold from Small-Scale Miners, and the COVID-19 Levy.

During the presentation of the 2025 budget to Parliament, Dr. Forson confirmed the immediate abolition of five taxes with one to be phased out later in the year. Firstly, the controversial 10% withholding tax on betting winnings will be removed. Furthermore, the widely unpopular E-Levy, a 1% charge on electronic transfers, will also be eliminated. Additionally, the Emission Levy applied to industries and vehicles, along with VAT on motor vehicle insurance policies, will be scrapped, providing considerable relief to taxpayers.

Another tax set for removal is the 1.5% withholding tax imposed on unprocessed gold sales from small-scale miners, which has been a point of contention. Lastly, the COVID-19 Levy will be abolished later in the year as part of comprehensive VAT reforms. Dr. Forson articulated that these tax removals are essential in easing the fiscal pressures on households and fostering business growth, thereby enhancing tax compliance.

To offset the resultant revenue loss from these tax abolitions, the government plans to reduce the tax refund ceiling from 6% to 4% of total revenue. This measure, as specified in the Revenue Administration Act of 2016, is expected to save approximately GH¢3.8 billion in 2025. Dr. Forson indicated that this amount should sufficiently cover the revenue shortfall from the removal of the E-Levy and Betting Tax, aiming to create a conducive business environment while ensuring economic stability for the nation.

In conclusion, the Ghanaian government, under Finance Minister Dr. Cassiel Ato Forson, is poised to eliminate six contentious taxes as part of a broader fiscal strategy for 2025. This initiative is anticipated to lessen financial burdens on households, stimulate economic growth, and maintain tax compliance. The government’s strategic measures aim to offset revenue shortfalls while fostering a favorable business environment, thereby steering Ghana towards greater economic stability.

Original Source: africa.businessinsider.com