In the 2025 Budget presented on March 11, Finance Minister Dr. Cassiel Ato Forson announced the removal of several significant levies to ease the financial burden on Ghanaians and stimulate economic growth.
1. Electronic Transactions Levy (E-Levy):
Introduced in 2022 at a rate of 1.5%, the E-Levy was later reduced to 1%. It applied to mobile money and electronic transactions but faced widespread opposition for disproportionately affecting low-income earners and discouraging digital transactions. The government has now abolished this levy to promote financial inclusion and reduce living costs.
2. Betting Tax:
Implemented in 2023, this tax imposed a 10% withholding on all betting, lottery, and gaming winnings. It was criticized, especially by the youth, for hindering a popular recreational activity amid limited formal employment opportunities. The removal of this tax aims to alleviate financial strain and support economic recovery.
3. COVID-19 Levy:
Introduced to fund pandemic related expenses, the COVID-19 levy has also been scrapped as part of the government’s strategy to ease the cost of living and restore economic confidence.
The abolition of these levies is projected to result in a revenue shortfall of approximately GHS 6.37 billion in 2025. To mitigate this, the government plans to enhance tax collection efficiency and broaden the tax base, ensuring sufficient funding for essential public services without imposing additional burdens on citizens.
4. Emission Levy
The release of carbon emissions from vehicles and certain industries were a threat and the former government place taxes upon its emission to generate revenue to support the green economy.
5. 21% VAT on motor vehicle insurance policy
A 21% VAT rate on non life insurance was announced during 2024 budget by the former government. The levy aimed at insurance firms which implemented a 21% VAT on the supply of non life products, impacting various insurance categories which includes motor insurance, fire,liability insurance, marine insurance and compulsory insurance.
6. Tax on winning of unprocessed gold by small scale miners
The mining and minerals operations tax ( mineral royalty) imposed on the income of individuals or entities engaged in minerals operations saw a tax rate of 5% and it is applied to the total revenue earned from mining operations.
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