By Paul Eduarko Richardson
Accra, March 20, GNA – The Institute of Economic Affairs (IEA) Ghana has expressed concern over the 16.1% revenue-to-GDP ratio projected in the 2025 budget, arguing it lacks ambition as it is only marginally higher than the 15.9% for 2024.
In a statement copied to the Ghana News Agency, the Institute noted that by closing several tax loopholes and implementing other measures, the Government could significantly increase the nation’s revenue-to-GDP ratio.
The statement outlined the IEA’s views on the 2025 Budget and Economic Policy presented to Parliament by the finance minister on March 11.
The Institute noted that Ghana’s revenue-to-GDP ratio remained well below the average of 25 to 30 per cent for its peer middle-income countries.
Earlier, the IEA had proposed the abolition of the Growth and Sustainability Tax (GST), which was first introduced in 2001 as the Fiscal Stability Tax, describing it as obsolete.
However, the Government decided to maintain the GST in the 2025 Budget, increasing the rate from one per cent to three per cent for extractive companies.
The IEA argued that Ghana should demand more revenue from the extractives sector, including implementing a Super-Profit or Windfall Tax, and noted that the three per cent GST rate was not high enough.
The Institute advocated for a review of existing laws to enable the country to demand more favorable fiscal regimes from its extractives sector to maximise its benefits.
Regarding the elimination of certain taxes, the IEA welcomed the Government’s decision to abolish nuisance or obsolete taxes, including the E-Levy, Emissions Tax, and COVID Tax.
It however expressed disappointment that, contrary to its suggestion to maintain the Betting Tax at a reduced rate of 5 per cent (down from 10 per cent) for both revenue and deterrence purposes, the Government decided to abolish it completely.
Presenting the 2025 Budget and Economic Policy, Finance Minister Dr. Casiel Ato Forson announced several measures aimed at boosting revenue generation and achieving the fiscal targets for 2025.
The Minister also highlighted the removal of certain nuisance taxes in line with the Government’s manifesto promise.
These eliminations were intended to ease the burden on households, improve disposable incomes, support business growth, and enhance tax compliance.
GNA
KAS