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The Ministry of Finance has ditched several taxes in the 2025 Budget Statement, including the Electronic Transfer Levy (E-Levy), betting tax, and emission levy, to ease the financial strain on Ghanaians. They also scrapped VAT on motor vehicle insurance and a 1.5% withholding tax on unprocessed gold for small-scale miners. This is a significant shift aimed at helping households, small businesses, and industries struggling with high costs.
Direct Relief for Everyday People
The E-Levy, a 1% charge on electronic transactions since 2022, hit low-income and small traders hard, especially those using mobile money daily. Its removal will be a relief for customers making small transactions.
The 10% tax on betting and lottery winnings was also scrapped, a win for youths who supplement their income with betting due to the tough job market. The emission levy is another tax that affected transportation costs and manufacturing expenses, so citizens can anticipate lower prices in the coming months.
Finance Minister Breaks It Down
Finance Minister Dr Cassiel Ato Forson explained during Tuesday’s 2025 budget speech in Parliament. “We are committed to putting more money into the pockets of Ghanaians and improving disposable incomes. That is why we have decided to abolish these burdensome taxes that have become an albatross on the neck of households and businesses.”
Dr Forson stressed that these changes are aimed at boosting tax compliance and sparking business growth, part of the government’s plans for economic progress.
How The Government Will Plug the Revenue Hole
Cutting taxes means less cash coming in, so how’s the government handling it? Dr. Forson was ready with answers. “Our focus is not just on raising taxes but on stopping the bleeding in the system. The GH¢3.8 billion we are saving from reducing the tax refund ceiling alone is double the estimated loss from the abolished E-Levy and Betting Tax,” he explained.
The government is also rolling out VAT reforms, such as scrapping the COVID-19 levy and merging energy sector levies. A VAT Reform Task Force will work to fix flaws in the tax setup and boost compliance in partnership with the International Monetary Fund (IMF).
What’s Next and Why It Matters
These changes need the parliament’s nod with President John Dramani Mahama expected to sign them into law with a positive response. The moves should make digital payments cheaper, ease barriers for youth chasing extra income, and cut business costs.
However, analysts warn that the government needs to be proactive about finding other revenue streams to maintain healthcare, schools, and roads. For now, these tax cuts are a fundamental step toward giving Ghanaians more leverage with their money and businesses.
Source: E-play Africa
