E-levy Is No More: Ato Forson Announces Scrapping of Controversial Tax, Others in 2025 Budget

• Finance Minister Cassiel Ato Forson has announced the scrapping of the controversial Electronic Transfer Levy
• The betting tax and emissions levy are also among some Nana Akufo-Addo administration taxes being scrapped
• Forson also indicated that there would be major VAT reforms, including the scrapping of the levy for COVID-19

Finance Minister Cassiel Ato Forson has officially scrapped the controversial Electronic Transfer Levy (e-levy).

In addition to the e-levy being scrapped, the betting tax, emissions levy and the VAT on motor vehicle insurance are among some Nana Akufo-Addo administration taxes being scrapped.

During the budget statement, Forson said the removal of these taxes would ease the burden on households and improve their disposable incomes.

"In addition, it will support business growth and improve tax compliance," he added.

Forson also indicated that there would be major VAT reforms, including the scrapping of the COVID-19 levy, another controversial Akufo-Addo era revenue measure.

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As part of the VAT reforms, there will also be a reversing the decoupling of the Ghana Education Trust Fund and the National Health Insurance Levy, reducing the effective VAT rate for households and businesses; reversing the VAT flat rate regime and upwardly adjusting the VAT registration threshold to exempt micro and small businesses from the collection of VAT.

Samson Asaki Awingobit, the Executive Secretary of the Importers and Exporters association, said he would push for a further reduction of costs at the ports.

Awingobit said he expected further engagements with the government on certain issues in the budget.

“When he [the finance minister] engages us, we are going to call for a further reduction of the VAT at the port.”

What is Ghana's e-levy about?

Introduced in 2022, the controversial e-levy was a one per cent on all electronic transactions, with a daily free limit of GH¢100 and specific exemptions.

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At the time, the government said this was part of a seven-point agenda aimed at restoring macroeconomic stability and accelerating economic transformation.

The levy has been wildly unpopular and sparked protests from regular Ghanaians and mobile money vendors who have decried the double taxation.

Sammy Awuku speaks on scrapping betting tax

Sammy Awuku, a former Director-General of the National Lottery Authority, earlier backed the scrapping of the betting tax.

Awuku, now the Akuapem North legislator, said the tax on betting and lottery winnings was counterproductive.

The former NLA boss argued that the tax makes illegal betting operators more attractive to those looking to gamble.

The 10% withholding tax on betting and lotteries was introduced on August 15, 2023, to raise about GH¢400 million annually.

No new taxes in 2025 budget

YEN.com.gh also reported that Deputy Finance Minister-designate Thomas Nyarko Ampem said the government would not introduce new taxes in the 2025 budget.

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He said the government would instead focus on improving tax compliance and expanding the tax base through various means.

The Deputy Finance Minister-designate was responding to suggestions from the opposition that new taxes would be introduced.

He said the government would instead focus on improving tax compliance and expanding the tax base, easing the burden on citizens.

Proofreading by Bruce Douglas, copy editor at YEN.com.gh.

Source: YEN.com.gh