Ghana’s Finance Minister, Dr. Cassiel Ato Forson, announced six tax abolitions for the 2025 budget, including the Betting tax and E-Levy. This aligns with the NDC’s electoral promises and aims to ease financial burdens and stimulate growth. A reduction in the tax refund ceiling will offset lost revenues, ensuring economic stability.
Ghana’s Finance Minister, Dr. Cassiel Ato Forson, announced during the presentation of the 2025 budget that six contentious taxes will be eliminated. This aligns with the National Democratic Congress’s (NDC) 2024 manifesto commitment to scrap these ‘nuisance’ taxes. The taxes to be abolished 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.
The first tax on the list is the 10% withholding tax on betting winnings, known as the Betting Tax, which was introduced in 2023. Dr. Forson stated, “Mr Speaker, we will abolish the 10% withholding tax on winnings from lottery, otherwise known as the ‘Betting Tax.’” The E-Levy, a 1% levy on electronic money transfers, will also be removed.
Another tax set for removal is the Emission Levy, effective from February 1, 2024, under the Emissions Levy Act, 2023 (Act 1112). Dr. Forson confirmed, “Mr Speaker, we will abolish the Emission Levy on industries and vehicles.” Additionally, the VAT on motor vehicle insurance policies will be abolished: “Mr Speaker, we will abolish the VAT on motor vehicle insurance policy.”
The 1.5% withholding tax on unprocessed gold from small-scale miners will also be eliminated, as affirmed by Dr. Forson: “Mr Speaker, we will abolish the 1.5% withholding tax on the winning of unprocessed gold by small-scale miners.” Lastly, the COVID-19 Levy will be phased out later this year.
The government anticipates that removing these taxes will alleviate financial burdens on households, boost disposable income, and foster business growth, leading to better tax compliance. To offset the revenue loss, the tax refund ceiling will be reduced from 6% to 4% of total revenue, saving an estimated GH¢3.8 billion in 2025. This adjustment is expected to balance the revenue shortfall from eliminated taxes such as the E-Levy and the Betting Tax.
These fiscal changes aim to create a more friendly business climate while ensuring economic stability in Ghana.
In summary, Ghana’s government is set to abolish six controversial taxes as part of its 2025 budget. This move fulfills a prior electoral commitment and aims to reduce financial pressures on citizens while promoting business growth. By adjusting tax refund ceilings, the government intends to maintain revenue stability despite the tax eliminations, ultimately fostering a more favorable economic environment.
Original Source: africa.businessinsider.com
