Finance Minister Dr. Cassiel Ato Forson unveiled a major tax overhaul as part of the 2025 Budget, announcing the removal of five so-called “nuisance taxes” aimed at reducing the financial burden on citizens and businesses.
In a speech before Parliament on Tuesday, March 11, Dr. Forson explained that the move aligns with the government’s manifesto commitments and its broader fiscal policy goals. Despite the government’s continued focus on increasing non-oil tax revenue by 0.6 percentage points of GDP under its IMF-backed program, these five taxes were scrapped to improve disposable income, encourage business growth, and boost tax compliance.
The taxes that will be eliminated include:
- A 10% withholding tax on lottery winnings (Betting Tax).
- The 1% Electronic Transfer Levy (E-Levy).
- The Emission Levy on industries and vehicles.
- VAT on motor vehicle insurance policies.
- A 1.5% withholding tax on unprocessed gold winnings by small-scale miners.
Dr. Forson emphasized that the tax cuts were designed to alleviate pressure on households and stimulate economic activity, fostering a more conducive environment for growth.
In addition, the Finance Minister addressed concerns over the misuse of the Tax Refund Account, revealing that GHS16.6 billion (57% of the account’s funds) had been misapplied over the past eight years, violating both the Revenue Administration Act, 2016, and the Public Financial Management Act, 2016. To remedy this, the government will reduce the tax refund ceiling from 6% to 4% of total revenue, as required by law.
The 2025 budget marks a significant shift in fiscal policy as the government seeks to balance the needs of economic growth with improved tax fairness.
Source:TheDotNews