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0 The Institute of Economic Affairs (IEA) welcomed the decision by the Minister for Finance, Dr. Cassiel Ato Forson, to abolish certain nuisance and/or obsolete taxes in accordance with the government’s promise, which the Institute endorsed.
The nuisance taxes include the Electronic Transactions Levy, Emissions Tax and Covid Tax.
In its comments on the 2025 Budget and Economic Policy, the IEA, however, noted that contrary to its suggestion for the Betting Tax to be maintained albeit at a reduced rate of 5% instead of 10% for both revenue and deterrence reasons, the Minister decided to abolish it completely.
Also, while the IEA proposed that the Growth and Sustainability Tax (GST), which was first introduced in 2001 as the Fiscal Stability Tax, should be abolished for being obsolete, the Minister decided to maintain it, while increasing the rate from 1% to 3% for extractives companies.
Growth and Sustainability Tax is not High Enough
The policy think tank argued for Ghana to 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”.
The IEA continued that the projected revenue-to-Gross Domestic Product (GDP) ratio of 16.1%, which is only marginally higher than that of 15.9% for 2024, is not ambitious enough.
“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.
