Presenting the 2025 budget to Parliament, he revealed that six contentious taxes would be scrapped, aligning with the National Democratic Congress (NDC)’s 2024 manifesto promise to eliminate these levies if elected into office.
Dr Forson emphasised that removing these taxes is a crucial step towards achieving Ghana’s fiscal targets for 2025.
“Government is proposing some revenue measures to achieve the 2025 fiscal targets for the consideration and approval of Parliament,” he stated.
He then outlined five taxes that will be abolished immediately and one that will be phased out later in the year.
Taxes to be abolished
The first tax to be scrapped is the controversial 10% withholding tax on bet winnings, introduced by the previous government in 2023.
“Mr Speaker, we will abolish the 10% withholding tax on winnings from lottery, otherwise known as the ‘Betting Tax’,” Dr Forson announced.
The widely unpopular levy on electronic money transfers, known as the E-Levy, will also be removed.
“Mr Speaker, we will abolish the Electronic Transfer Levy (E-Levy) of 1%,” he confirmed.
The Emission Levy, which took effect on 1 February 2024 under the Emissions Levy Act, 2023 (Act 1112), is also set for abolition.
“Mr Speaker, we will abolish the Emission Levy on industries and vehicles,” he stated.
4. VAT on Motor Vehicle Insurance Policies
Value-added tax (VAT) on motor vehicle insurance policies will be scrapped as part of the government’s tax relief measures.
“Mr Speaker, we will abolish the VAT on motor vehicle insurance policy,” Dr Forson declared.
5. Tax on Unprocessed Gold from Small-Scale Miners
The 1.5% withholding tax on the sale of unprocessed gold by small-scale miners will also be abolished.
“Mr Speaker, we will abolish the 1.5% withholding tax on the winning of unprocessed gold by small-scale miners,” he affirmed.
The final tax to be removed is the COVID-19 levy, which is set to be abolished later this year as part of broader VAT reforms.
Impact of tax removals
Dr Forson stated that eliminating these taxes will ease the financial burden on households, increase disposable income, and support business growth. Furthermore, the move is expected to enhance tax compliance.
To compensate for lost revenue, the government will reduce the tax refund ceiling from 6% to 4% of total revenue, as outlined in Section 69 of the Revenue Administration Act, 2016 (Act 915). This measure is projected to save GH¢3.8 billion in 2025 alone.
“This amount is sufficient to cover the revenue shortfall from the removal of the E-Levy, which accounts for GH¢1.9 billion, and the Betting Tax, estimated at GH¢180 million,” he noted.
With these strategic fiscal adjustments, the government aims to create a more favourable business environment while maintaining economic stability.