Ghana’s Finance Minister, Dr. Cassiel Ato Forson, announced the abolition of six contentious taxes in the 2025 budget, aligning with the NDC’s manifesto promise. The taxes to be scrapped 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. These eliminations aim to alleviate financial burdens and support economic growth.
In a significant announcement, Ghana’s Finance Minister, Dr. Cassiel Ato Forson, revealed plans to abolish six “nuisance” taxes as part of the upcoming 2025 budget. This decision aligns with the National Democratic Congress (NDC)’s commitment in their 2024 manifesto, aimed at easing the financial burden on citizens and promoting economic growth.
The six taxes scheduled for elimination 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. In addressing Parliament, Dr. Forson highlighted these cancellations as essential steps towards meeting Ghana’s fiscal targets for the year, emphasizing the need for necessary revenue measures.
The first tax to be abolished is the 10% withholding tax on betting winnings, known as the Betting tax, introduced previously in 2023. In his statement, Dr. Forson clearly articulates, “We will abolish the 10% withholding tax on winnings from lottery, otherwise known as the ‘Betting Tax.’” Additionally, the E-Levy, which imposes a tax on electronic money transfers and has faced widespread criticism, will also be eliminated, with Dr. Forson confirming, “We will abolish the Electronic Transfer Levy (E-Levy) of 1%.”
Further measures include scrapping the Emission Levy, which was initiated in February 2024, as well as the VAT on motor vehicle insurance policies, which is part of an effort to provide tax relief. Dr. Forson stated, “We will abolish the VAT on motor vehicle insurance policy.”
Moreover, the 1.5% tax on unprocessed gold from small-scale miners will be annulled. Dr. Forson affirmed, “We will abolish the 1.5% withholding tax on the winning of unprocessed gold by small-scale miners.” The COVID-19 Levy will also be phased out later this year as part of broader VAT reforms.
The implications of these tax removals are significant, as Dr. Forson suggests that they will alleviate financial pressures on households, enhance disposable income, and encourage business development. To mitigate the loss of revenue from these eliminations, the government plans to adjust the tax refund ceiling from 6% to 4% of total revenue, which is expected to save GH¢3.8 billion in 2025. This projected savings aims to offset the revenue shortfall created by the removal of the E-Levy and the Betting Tax, estimated at GH¢1.9 billion and GH¢180 million, respectively.
Through these calculated fiscal changes, the Ghanaian government seeks to foster a more supportive business environment while striving to uphold economic stability.
In conclusion, Ghana’s upcoming 2025 budget will see the abolition of six highly debated taxes, responding to public sentiments and aligning with the NDC’s electoral manifesto. This initiative aims to enhance the financial landscape for citizens and businesses alike, while the government prepares measures to offset potential revenue losses. The strategic implementation of these tax reforms is anticipated to promote economic growth and stability going forward.
Original Source: africa.businessinsider.com
