Finance Minister, Dr. Cassiel Ato Forson Outlines Taxes to be Scrapped in 2025 Budget

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The Finance Minister, Dr. Cassiel Ato Forson has announced the taxes that will be scrapped in the 2025 budget.

In a significant move, the Minister of Finance highlighted the government’s commitment to delivering on its promises, citing several achievements on the floor of Parliament on Tuesday March 11, 2025

Dr. Ato Forson stated that that government as promised in their 2024 Manifesto is here to deliver all their promises.

Stating the taxes to be scrapped/abolished, he listed the following:

E-Levy (1%) – SCRAPPED
Betting (winnings) Tax (10%) – SCRAPPED
Emission Levy on industries – SCRAPPED
VAT on Motor Insurance – SCRAPPED
COVID-19 Levy – SCRAPPED
1.5% on withholding tax on unprocessed gold sales – SCRAPPED

Excerpt from the 2025 Budget read by Finance Minister, Dr. Cassiel Ato Forson on Tuesday March 11, 2025 on the floor of Parliament

2025 Revenue Measures

138. Mr. Speaker, Government is proposing some revenue measures to achieve the 2025 fiscal targets for the consideration and approval of Parliament.

139. This is consistent with our commitment under the IMF-supported programme to observe a non-oil tax revenue effort of 0.6 percentage points annually as part of measures to improve domestic revenue mobilisation and achieve our debt sustainability
targets over the medium-term.

140. Mr. Speaker, despite our commitment to increase the non-oil tax revenue by 0.6 percentage points of GDP, we have programmed the following nuisance
taxes for removal in line with our manifesto promise.

141. Mr. Speaker:

i. we will abolish the 10% withholding tax on
winnings from lottery, otherwise known as the
“Betting Tax”;

ii. we will abolish the Electronic Transfer Levy (ELevy) of 1%;

iii. we will abolish the Emission Levy on industries and vehicles;

iv. we will abolish the VAT on motor vehicle
insurance policy; and

v. we will abolish the 1.5% withholding tax on
winning of unprocessed gold by small-scale
miners.

142. Mr. Speaker, the removal of these taxes will ease the burden on households and improve their disposable incomes. In addition, it will support business growth and improve tax compliance.

Mr. Speaker, the Tax Refund Account has been abused in recent years. A study on the use of the tax refunds in the last eight (8) years revealed that GHS29.11 billion had accrued to the tax refund account with only 12.5 billion, representing 43% of 42 the total accrued amount is used for tax refund purposes.

144. The study also revealed that GHS16.6 billion, representing 57% of the total amount accumulated in the tax refund account was misapplied, which is a total violation of the Revenue Administration Act, 2016 (Act 915) and the Public Financial Management Act, 2016 (Act 921).

145. Instructively, there were virtually no tax refund arrears over the period.

146. Therefore, we are reducing the current tax refund ceiling by 2 percentage points from 6% to 4% of Total Revenue as defined in Section 69 of the Revenue Administration Act, 2016 (Act 915).

147. Mr. Speaker, 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 GH¢1.9 billion and the Betty Tax of GH¢180 million.

148. 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.