The government has announced the removal of several controversial taxes in the 2025 Budget Statement presented to Parliament.
The move, according to the Finance Minister, Dr. Cassiel Ato Forson, is aimed at easing the financial burden on households and supporting business growth while improving tax compliance.
“Mr. Speaker, we will abolish the 10% withholding tax on winnings from lotteries, otherwise known as the ‘Betting Tax.’ We will also abolish the Electronic Transfer Levy (E-Levy) of 1%, the Emission Levy on industries and vehicles, the VAT on motor vehicle insurance policies, and the 1.5% withholding tax on winnings from unprocessed gold by small-scale miners,” Dr. Forson stated during his presentation of the 2025 budget statement on Tuesday, March 3, 2025.
He emphasized that these tax removals will result in increased disposable income for Ghanaians, stimulate economic activity, and encourage greater voluntary tax compliance.
Dr. Forson also highlighted significant concerns about the management of the Tax Refund Account, revealing that a study over the past eight years showed that GH¢29.11 billion had accumulated in the fund. However, only GH¢12.5 billion, representing 43% of the total, had been used for its intended tax refund purposes.
“The study also revealed that GH¢16.6 billion, representing 57% of the total amount accumulated in the tax refund account, was misapplied. This is a total violation of the Revenue Administration Act, 2016 (Act 915) and the Public Financial Management Act, 2016 (Act 921),” he disclosed.
As part of measures to streamline tax refunds and ensure efficiency, the finance minister announced a reduction in the tax refund ceiling from 6% to 4% of total revenue. “By reducing the ceiling on the tax refund from 6% to 4%, we will save GH¢3.8 billion. This amount is enough to close the revenue shortfall from the removal of the E-Levy amounting to GH¢1.9 billion and the Betting Tax of GH¢180 million,” Dr. Forson explained.
Addressing concerns from Ghanaians about the potential revenue gap created by these tax cuts, Dr. Forson assured the nation that the government had already identified and blocked revenue leakages to cover the shortfall.
“Mr. Speaker, already we have saved GH¢3.8 billion for 2025 alone from only one source, and this is enough to close the gap from the taxes that we have removed. To address the concerns from well-meaning Ghanaians on how we are going to close the revenue shortfall as a result of the removal of selected taxes, the answer is we have stopped the bleeding.”
