Ghana’s new government has announced the removal of several taxes introduced during the COVID-19 pandemic, citing the economic strain they placed on citizens. The decision is part of efforts to meet conditions for continued support from the International Monetary Fund (IMF).
Finance Minister Cassiel Ato Forson, while presenting the 2025 budget, stated that five taxes—labeled as “nuisance levies” by the current administration—would be scrapped. These include a one-percent levy on mobile money transactions and a value-added tax on motor vehicle insurance. Other eliminated taxes include a 10-percent levy on lottery winnings, an emissions tax on industries and vehicles, and a 1.5-percent tax on unprocessed gold from small-scale miners.
The abolished taxes were initially introduced by the previous government as part of efforts to secure a $3 billion IMF bailout, which was finalized in 2023. However, Forson emphasized that the removal of these levies would reduce the financial burden on households and stimulate business growth.
Addressing Economic Challenges
Despite these tax cuts, concerns remain over how the government will offset revenue losses amid Ghana’s ongoing economic difficulties. Forson acknowledged that the economy is still facing severe distress due to debt mismanagement, financing gaps, and fiscal challenges in key sectors such as energy and cocoa production.
To address these issues, the government plans to amend the Revenue Administration Act to enhance tax collection efficiency, a move expected to generate an additional 0.3 percent of GDP. Authorities also intend to improve road toll collection as part of an infrastructure initiative known as the “Big Push.”
Boosting Economic Stability
President John Mahama’s administration, which took office in January following the December 2024 elections, has assured Ghanaians that efforts are underway to stabilize the economy. Forson stated that the government had “stopped the bleeding” and was implementing measures to strengthen revenue collection without widening the fiscal deficit.
In addition, plans are in place to establish the Ghana Gold Board to regulate the mining sector, boost foreign exchange reserves, and stabilize the local currency. Illegal mining, commonly known as galamsey, has surged due to rising gold prices, contributing to environmental damage and economic instability.
Economic analysts have welcomed the tax cuts, with economist Daniel Amateye Anim-Prempeh stating that the move will “put money back into citizens’ pockets and help businesses recover.” However, he cautioned that the government’s success would depend on its ability to generate revenue through improved tax collection rather than increasing the deficit.