Finance Minister, Dr. Cassiel Ato Forson has announced the abolition of several taxes in a move designed to ease the financial burden on households and ensure the growth of businesses in the country.
These include the controversial E-Levy and betting tax, lottery taxes, emission levy, VAT on motor vehicle insurance policies and the tax on unprocessed gold by small scale miners.
“Right Honourable Speaker, despite our commitment to increase the non-oil tax revenue by 0.6%, we have programmed the following nuisance taxes for removal in line with our manifesto promise.
Mr. Speaker, we will abolish the 10% withholding tax on betting.We will abolish the electronic transfer levy, e-levy of 1%. We will abolish the emission levy, otherwise known as the “NWusuo Tax”. We will abolish the VAT on motor vehicle insurance policy. Mr. Speaker, we will abolish the 1.5% withholding tax on unprocessed gold by small-scale miners.
According to the minister, the removal of these taxes will ease the burden on households, improve their disposable income and in addition, will support business growth and improve tax compliance.
Meanwhile, Dr. Ato Forson, revealed alarming details about the misuse of the tax refund account stressing that the tax refund account has been abused in recent years.
He noted that “in the last eight years, a study revealed that 16.6 billion Ghana Cedis representing 57% of the total amount accumulated in the tax refund account was misapplied.”
He described it as a total violation of the Revenue Administration Act, Act 915 and the Public Financial Management Act.
In order to address this, he said the government is reducing the tax refund ceiling “by 2 percentage points from 6% to 4% of total revenue…”
Dr. Forson assured the public that these measures will compensate for the revenue losses from the tax cuts expressing that “by reducing the ceiling on the tax refund from 6% to 4%, we have saved the taxpayer 3.8 billion Ghana Cedis…”
Mr. Speaker, to address the concerns from well-meaning Ghanaians on how we are going to close the revenue shortfalls as a result of the removal of the selected taxes, the answer is that we have stopped the bleeding.”
“Mr. Speaker, the e-Levy would have accrued 1.9 billion Ghana Cedis and the Betting Tax would have accrued 180 million. The two put together is just about 2 billion Ghana Cedis. By reducing the tax refund account from 6% to 4%, it is enough to remove this tax and a savings would be provided to take care of social interventions.”
“Mr. Speaker, already we have saved 3.8 billion cities for 2025 alone from one source and this is enough to close the gap from the taxes we have removed today. Mr. Speaker, to address the concerns from well-meaning Ghanaians on how we are going to close the revenue shortfalls as a result of the removal of the selected taxes, the answer is that we have stopped the bleeding.”
“We have stopped the bleeding. Mr. Speaker, accordingly, with this budget, we will amend the Revenue Administration Act 2016, Act 915. This measure will improve the tax revenue net of tax refund by 2%, representing 0.3% of GDP.”
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