The announcement, made during his presentation to Parliament on Tuesday, March 11, outlined significant tax reforms aimed at improving disposable incomes and supporting private business growth.
Among the key measures, the Finance Minister revealed including elimination of the 10% withholding tax on lottery winnings, commonly referred to as the “Betting Tax,” and the 1% Electronic Transfer Levy (E-Levy).
Additionally, the Emission Levy on industries and vehicles, VAT on motor vehicle insurance policies, and the 1.5% withholding tax on small-scale miners’ gold earnings will also be scrapped.
The removal of these taxes, the Minister assured, will ease the burden on households improve their disposable incomes and also support business growth, and improve tax compliance.
Ato Forson also disclosed the misuse of the Tax Refund Account, revealing that GH¢16.6 billion, representing 57% of the total amount accumulated over the past eight years had been misapplied.
This, he noted, was a violation of the Revenue Administration Act, 2016 (Act 915) and the Public Financial Management Act, 2016 (Act 921).
According to him, to address this, the government will reduce the tax refund ceiling from 6% to 4% of total revenue, saving GH¢3.8 billion.
“This amount is enough to close the revenue shortfall from the removal of the E-Levy and the Betting Tax,” the Minister explained.
The budget also proposed reforms in the energy sector, consolidating the Energy Debt Recovery Levy, Energy Sector Recovery Levy, and Sanitation & Pollution Levy into a single levy. This measure aims to address energy sector shortfalls and service inherited debt obligations.
In the extractive sector, the government plans to increase the Growth & Sustainability Levy from 1% to 3% on the gross production of mining companies.
Ato Forson stressed that Ghana has not sufficiently capitalized on the benefits of its extractive sector and therefore the increase will enable the nation to capture its fair share of the windfall from rising gold prices.
The Finance Minister also announced plans to reintroduce road tolls in 2025, leveraging technology-driven solutions to improve revenue collection for road construction and maintenance. He indicated that the existing zero-rate policy for road tolls has dimmed prospects of raising enough revenue for road infrastructure.
He indicated that to improve tax compliance, the government will launch an aggressive tax education campaign over the next 2-3 years, targeting SMEs and personal income taxpayers. The current compliance rate for SMEs and personal income tax is below 30%, which is extremely low.
We will also institute quarterly dialogues between the Ghana Revenue Authority, Ministry of Finance, and the business community to address tax-related issues promptly.”
The 2025 budget, the Minister stressed, reflects the government’s commitment to reducing the tax burden on citizens while ensuring sustainable revenue generation adding, “We have stopped the bleeding,” and assured Ghanaians that the measures outlined would not only improve household incomes but also strengthen the economy.
