Minister of Finance, Dr. Cassiel Ato Forson, has revealed that reducing the ceiling on tax rate funds from 6% to 4%—a move expected to save GHS 3.8 billion—will cover expenses previously funded by abolished taxes under the NDC administration.
“Mr. Speaker, we will abolish the 10% withholding tax on betting, we will abolish the electronic transfer e-levy of 1%, we will abolish the emission levy otherwise known as the ‘awusie tax’, we will abolish the VAT on motor vehicle insurance policies, and we will abolish the 25% withholding tax on unprocessed gold by small-scale miners,” Dr. Forson stated referencing the tax cuts promised by President John Dramani Mahama.
“The removal of these taxes will ease the burden on households and improve their disposable incomes. In addition, it will support business growth and improve tax compliance,” he added.
To compensate for the revenue shortfall caused by scrapping these taxes, Dr. Forson explained that funds reserved in Ghana’s tax refund account will be utilized. “By reducing the ceiling on the tax rate funds from 6% to 4%, we have saved the taxpayer GHS 3.8 billion. This amount is sufficient to cover the revenue shortfalls from the e-levy and the betting levy.”
The tax refund account, expected to replace the lost revenue from the e-levy and betting tax, which were projected to generate GHS 1.9 billion and GHS 180 million, respectively will be strategically utilized to support social interventions.
By: Kobina Baidoo
