2025 Budget: Gov’t to abolish e-levy, betting tax, emission levy, others to ease burden  

By Juliet ETEFE & Buertey Francis BORYOR

Government has announced a raft of tax relief measures in the 2025 Budget, aimed at easing the cost of living and stimulating business growth, with a firm focus on abolishing several so-called “nuisance taxes.

Among the most notable decisions is the abolition of the 1% Electronic Transfer Levy (E-Levy) and the 10% tax on betting and lottery winnings, delivering on a key manifesto promise of the John Mahama-led administration.

Presenting the 2025 budget statement to Parliament on Tuesday, Finance Minister Dr. Cassiel Ato Forson said: “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.”

Other taxes to be scrapped include the Emission Levy on vehicles and industries, VAT on motor vehicle insurance policies, and the 1.5% withholding tax on unprocessed gold from small-scale miners.

According to Dr. Forson, “the removal of these taxes will not only reduce the cost of doing business but also improve compliance and foster a more business-friendly environment.”

Despite removing these revenue lines, the government is confident the shortfall will be covered through improved efficiency and reforms in tax administration.

The Finance Minister disclosed that a reduction in the tax refund ceiling from 6% to 4% would save the government GH¢3.8 billion, more than enough to offset the revenue gap from scrapped taxes.

“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 said.

Additionally, government will introduce comprehensive VAT reforms, aimed at eliminating distortions in the current system and reducing the effective tax burden on businesses and consumers.

A VAT Reform Task Force will be inaugurated, and technical assistance has been requested from the International Monetary Fund (IMF) to guide the process.

Key parameters for the VAT reform include abolishing the COVID-19 levy, reversing the decoupling of GETFund and NHIL from VAT, and raising the VAT registration threshold to exempt micro and small businesses from collection duties.

In a move to promote sustainable public financing, the government also intends to consolidate the Energy Sector Levies into a unified framework to improve transparency and utilisation of funds.

The Growth and Sustainability Levy on mining firms has been increased from 1% to 3% of gross production, to ensure the country benefits from current high gold prices.

“The extractive sector must contribute its fair share to national development. Ghana’s resource rent is about 14% of GDP, yet actual revenues are only around 1.5%. We must correct this imbalance,” Dr. Forson noted.

Meanwhile, road users should brace for a return of road tolls in 2025 as part of the government’s infrastructure financing plan. The tolls will be reintroduced using a technology-driven system under the “Big Push” infrastructure programme.

As the government rolls out these revenue reforms, it hopes to enhance voluntary compliance and restore confidence in the tax system while creating the fiscal space needed to implement its development agenda.

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