Ghana's Finance Minister, Dr. Cassiel Ato Forson, has announced the government's decision to abolish six controversial taxes in the 2025 budget, aligning with the National Democratic Congress (NDC)’s 2024 manifesto promise. The move is expected to ease the financial burden on households, increase disposable income, and support business growth.

The six taxes to be scrapped include the Betting tax, E-Levy, Emission Levy, VAT on Motor Vehicle Insurance Policies, Tax on Unprocessed Gold from Small-Scale Miners, and the COVID-19 Levy. These taxes have been deemed "nuisance" taxes, and their removal is seen as a crucial step towards achieving Ghana's fiscal targets for 2025.

The Betting tax, introduced in 2023, is a 10% withholding tax on bet winnings. The E-Levy, a widely unpopular levy on electronic money transfers, will also be removed. The Emission Levy, which took effect on 1 February 2024, will be abolished, along with the VAT on motor vehicle insurance policies and the 1.5% withholding tax on the sale of unprocessed gold by small-scale miners.

The COVID-19 Levy, introduced to support the country's response to the pandemic, will be abolished later this year as part of broader VAT reforms. The removal of these taxes is expected to enhance tax compliance and create a more favorable business environment while maintaining economic stability.

To compensate for the 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, sufficient to cover the revenue shortfall from the removal of the E-Levy and the Betting Tax.

The abolition of these taxes is seen as a strategic fiscal adjustment aimed at creating a more favorable business environment while maintaining economic stability. The move is expected to have a positive impact on the economy, increasing disposable income and supporting business growth.

This development is part of the government's efforts to drive economic growth and create a more favorable business environment. Recently, Ghana unveiled tax incentives and cheap electricity to drive a 24-hour economy, demonstrating the government's commitment to supporting businesses and stimulating economic growth.

The abolition of these taxes is a significant step towards achieving Ghana's fiscal targets for 2025 and creating a more favorable business environment. As the government continues to implement its economic policies, it remains to be seen how these changes will impact the economy and the lives of Ghanaians.