The government has abolished five taxes to provide relief to businesses and stimulate production, in fulfilment with the campaign promise to revitalise the economy and alleviate the financial burdens faced by Ghanaians.
They are, the 10 per cent withholding tax on winnings from lottery known as Betting Tax, the one per cent Electronic Transfer Levy, Emission Levy on Industries and Vehicles, Valued Added Tax on motor vehicle insurance policy.
The rest are the 1.5 per cent withholding tax on winning of unprocessed gold by small-scale miners.
Presenting the 2025 budget statement and economic policy of the government to Parliament in Accra yesterday, Finance Minister, Dr Cassiel Ato Baah Forson, said as part of the government’s 120-day social contract, the government pledged to review those taxes to revamp the economy and address hardship the citizens were going through.
This year’s budget, the first of the ruling government is on the theme “Resetting the economy for the Ghana we want.”
The Finance Minister said despite the government’s commitment to increasing the non-oil tax revenue by 0.6 percentage point of Gross Domestic Product (GDP), it had decided to scrap those taxes in line with government’s manifesto promise.
“Mr Speaker, the removal of these taxes will ease the burden on households and improve their disposable incomes. In addition, it will support business growth and improve tax compliance,” the Minister stated.
The Finance Minister highlighting on the Tax Refund Account, said the fund had been abused in the past eight years.
“A study on the use of the tax refunds in the last eight years revealed that GH¢29.11 billion had accrued to the tax refund account with 42 of the total accrued amount used for tax refund purposes. The study also revealed that GH¢16.6 billion, representing 57 per cent of the total amount accumulated in the tax refund account was misapplied, which is a total violation of the Revenue Administration Act, 2016 (Act 915) and the Public Financial Management Act, 2016 (Act 921),” he said.
Dr Forson said there was virtually no tax refund arrears over the period, indicating that the government was, therefore reducing the current tax refund ceiling by two percentage points from six per cent to four per cent of total revenue as defined in Section 69 of the Revenue Administration Act, 2016 (Act 915).
“Mr Speaker, by reducing the ceiling on the tax refund from six per cent to four per cent, we will save GH¢3.8 billion. This amount is enough to close the revenue shortfall from the removal of the E-Levy amounting GH¢1.9 billion and the Betting Tax of GH¢180 million,” the Finance Minister stated, adding that that has saved GH¢3.8 billion for 2025 alone from only one source and this was enough to close the gap from the taxes that the government had scrapped.
He said the government would prioritise prudent expenditure and “stop the bleeding” in the use of state revenue.
“Accompanied with this budget, we will amend the Revenue Administration Act, 2016 (Act 915). This measure will improve the tax revenue, net of tax refunds by two per cent, representing 0.3 per cent of GDP,” Mr Forson stated.
BY KINGSLEY ASARE & CYNTHIA ASAMPANA
