Breaking: E-Levy, Betting Tax, and 3 Others Abolished in 2025 Budget

In a significant policy shift, Finance Minister Dr. Cassiel Ato Forson, during the 2025 Budget Statement reading, announced the removal of five contentious taxes that had been widely criticized by the public. These included the following:

• 10% Withholding Tax on Lottery Winnings ("Betting Tax"): This tax applied to earnings from lotteries and betting activities.
• 1% Electronic Transfer Levy (E-Levy): Introduced in 2022, this levy was imposed on mobile money and electronic transactions.
• Emission Levy on Industries and Vehicles: This levy targeted emissions from industrial activities and vehicles.
• VAT on Motor Vehicle Insurance Policies: Value-added tax applied to insurance policies for motor vehicles.
• 1.5% Withholding Tax on Unprocessed Gold Winnings by Small-Scale Miners: This tax was levied on earnings from unprocessed gold by small-scale miners.

The rationale behind these tax removals, according to Dr. Forson, is to reduce the financial strain on ordinary Ghanaians, enhance disposable income, and create a more favorable business environment. The government aims to fulfill a key National Democratic Congress (NDC) manifesto promise while encouraging economic recovery. Critics of these taxes argued that they stifled investment, discouraged financial inclusion, and made everyday transactions more expensive for citizens. By eliminating these levies, the government is signaling its commitment to making taxation more progressive and ensuring that revenue collection does not unduly harm economic activities. However, there remains the challenge of finding alternative revenue streams to compensate for the potential shortfall.

Despite these changes, it is crucial for Ghanaians to remember the impact these so-called "nuisance taxes" had on their livelihoods. The taxes, while initially introduced to boost government revenue, ended up becoming sources of frustration and hardship, disproportionately affecting lower-income individuals and small businesses. Their removal should serve as a lesson for future administrations on the importance of designing tax policies that balance revenue generation with economic growth and social equity. Moving forward, attention must be given to improving tax compliance, expanding the tax net, and ensuring that the burden of taxation is distributed fairly across different economic sectors.