By Eric Appah Marfo
Accra, March 11, GNA – The Government has abolished the Betting Tax, Electronic Transfer Levy (E-Levy) and Emissions Levy, Dr Cassiel Ato Forson, Minister of Finance, has announced.
The E-Levy and the Betting Tax were among the key campaign promises of then Presidential Candidate John Dramani Mahama.
Presenting the 2025 Budget Statement and Economic Policy in Parliament in Accra on Tuesday, Dr Forson said the removal of these taxes would ease the financial burden on households and improve their disposable incomes.
He also disclosed the removal of the Value Added Tax (VAT) on motor vehicle insurance policies and the 1.5 per cent withholding tax on winnings from unprocessed gold by small-scale miners, saying that, It would also support business growth and enhance tax compliance, he added.
The budget presentation was in accordance with Article 179 of the 1992 Constitution.
Several taxes were introduced under the previous administration, which became known as “nuisance taxes” due to their perceived negative impact on the average citizen.
Among the most contentious were the Covid-19 Health Levy, Sanitation and Pollution Levy (SPI), E-Levy and Betting Tax.
These taxes were widely regarded as burdensome and regressive, placing a disproportionate strain on lower-income households and businesses. President John Dramani Mahama, during his election campaign, had promised to remove them to alleviate the economic hardship faced by Ghanaians.
Dr Forson said the Tax Refund Account had been abused in recent years, citing a study that revealed GHS29.11 billion had accrued to the account over the past eight years.
However, only GHS12.5 billion—representing 43 per cent of the total amount—was used for tax refunds.
The study further revealed that GHS16.6 billion, representing 57 per cent of the accrued amount, was misapplied, violating the Revenue Administration Act, 2016 (Act 915) and the Public Financial Management Act, 2016 (Act 921).
“Instructively, there were virtually no tax refund arrears over the period. Therefore, we are 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)”
He noted that reducing the tax refund ceiling from six per cent to four per cent would save the government GHS3.8 billion.
This amount, he said, would be sufficient to offset the revenue shortfall from the removal of the E-Levy, which amounted to GHS9 billion, and the Betting Tax, which accounted for GHS180 million.
“Already, we have saved GHS8.8 billion for 2025 alone from only one source, and this is enough to close the gap from the taxes we have removed,” he added.
To further address concerns about revenue shortfalls, the Minister said the government would amend the Revenue Administration Act, 2016 (Act 915) to improve tax revenue, net of tax refunds, by two percentage points, representing 0.3 per cent of GDP.
In line with government policy, he announced that the recently negotiated 2025 minimum wage, agreed upon by the National Tripartite Committee, would be zero-rated for tax purposes to protect low-income earners and the vulnerable.
Additionally, without increasing levies, the government plans to review the Energy Sector Levies Act (ESLA) to consolidate the Energy Debt Recovery Levy, Energy Sector Recovery Levy (Delta Fund), and Sanitation & Pollution Levy into a single levy.
Proceeds from this levy would be used to address energy sector shortfalls and service inherited debt obligations.
Dr Forson clarified that other energy sector levies, including the Road Fund Levy, Energy Fund Levy, Price Stabilisation and Recovery Levy, Public Lighting Levy, and National Electrification Levy, would remain to serve their intended purposes.
He said Ghana had not fully capitalised on the benefits of its extractive sector to generate revenue for development and economic diversification.
“Natural resource rent which is the difference between the revenue of a commodity and the average cost of producing it, is about 14 per cent of GDP for Ghana.”
“However, revenue from the extractive industry is around 1.5 per cent of GDP only. This is because we fail to fully capture the economic rent of our natural resources,” he added.
GNA
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