Additionally, the government aims to enhance road toll collection this year as part of its infrastructure development initiative, dubbed the “Big Push.” On Tuesday, Ghana’s new government announced the elimination of several Covid-era taxes introduced to secure IMF financing, citing the economic hardship placed on ordinary citizens. Finance Minister Cassiel Ato Forson, presenting the government’s 2025 budget, announced the cancellation of five taxes deemed “nuisance levies” by the current administration. These include a one-percent levy on mobile money transfers and a value-added tax on motor vehicle insurance. With the economy in “severe distress” due to debt mismanagement and financing shortfalls, concerns quickly emerged about how the government plans to address the resulting revenue shortfall. Authorities are seeking to help Ghanaians struggling with soaring inflation and a depreciating currency by introducing alternative measures to enhance tax collection. “The removal of these taxes will ease the burden on households and improve their disposable incomes,” Forson told lawmakers in the capital, Accra. “In addition, it will support business growth.” Other scrapped levies include a 10-percent tax on lottery winnings, an emission levy on industries and vehicles, and a 1.5-percent tax on unprocessed gold from small-scale miners. These taxes were introduced by the previous government as part of efforts to secure a $3-billion International Monetary Fund bailout, which was eventually obtained in 2023. Forson assured parliament that the new government under President John Mahama, elected in December, had “stopped the bleeding.” Plans are in place to amend the Revenue Administration Act to improve tax revenue collection, expected to yield an additional 0.3 percent of GDP. Additionally, the government aims to enhance road toll collection this year as part of its infrastructure development initiative, dubbed the “Big Push.” The tax cuts come as the economic crisis that pushed debt-laden Ghana towards the IMF continues. “We inherited an economy in deep crisis, hard hit with debt and beset by other fiscal challenges such as large accumulation of arrears, energy sector financing shortfalls, and large fiscal risks from the cocoa and financial sectors,” Forson said. Economist Daniel Amateye Anim-Prempeh praised the government’s move, stating that “the removal of these nuisance taxes will put money back into the pockets of citizens and help businesses recover.” However, he noted that the success of these measures depends on the government’s ability to boost revenue collection without increasing the fiscal deficit. Additionally, the government is setting up the Ghana Gold Board to help regulate and manage the sector, aiming to increase foreign exchange reserves and stabilize the local currency. Illegal mining, locally known as galamsey, has surged as high gold prices have drawn more workers to the sector, leaving environmental devastation in its wake.
