The Institute of Economic Affairs (IEA) has welcomed the decision by Finance Minister Dr. Cassiel Ato Forson to abolish certain nuisance and obsolete taxes in line with the government’s promise.
The taxes scrapped include the Electronic Transactions Levy, Emissions Tax, and Covid Tax.
In its comments on the 2025 Budget and Economic Policy, the IEA noted that while it had recommended reducing the Betting Tax to 5% instead of 10% for both revenue and deterrence purposes, the minister opted to abolish it entirely.
Additionally, the IEA proposed scrapping the Growth and Sustainability Tax (GST), which was initially introduced in 2001 as the Fiscal Stability Tax. However, the minister not only retained it but also increased the rate from 1% to 3% for extractive companies.
Growth and Sustainability Tax Not High Enough
The policy think tank argued that Ghana should demand more revenue from the extractives sector, including a Super-Profit or Windfall Tax.
“From that standpoint, the IEA does not believe that the GST of 3% is high enough. The Institute has consistently advocated for Ghana to maximise its benefits from its extractives by reviewing the existing laws to enable the country to demand more favourable fiscal regimes,” it stated.
The IEA also criticized the projected revenue-to-Gross Domestic Product (GDP) ratio of 16.1%, noting that it is only marginally higher than the 15.9% for 2024 and lacks ambition.
“As the Institute indicated in its pre-Budget statement, plugging the several tax loopholes, in addition to other measures, could significantly increase Ghana’s revenue-to-GDP ratio, which falls far below its peer middle-income countries’ average of 25-30%,” it added.