Fiscal Reform: A Step into a Brighter Future

Presenting the budget for 2025 before Parliament is never an easy task. It’s a moment of reckoning, where every number carries the weight of the expectations, ambitions, and hopes of an entire nation. This time around, the spotlight was squarely on the decision to abolish six controversial taxes, aligning with the National Democratic Congress (NDC)’s 2024 manifesto promise. Do promises made pre-election hold the magic they seem to carry, or do they falter under the inevitable pressure of governance?

Dr. Forson, addressing a sea of expectant faces, sounded a clarion call for fiscal prudence and economic rejuvenation. “Government is proposing some revenue measures to achieve the 2025 fiscal targets for the consideration and approval of Parliament,” he declared, exuding confidence mixed with cautious optimism.

He then took a decisive step by detailing which taxes would be scrapped immediately and which would phase out over the coming year. Among those to face the axe was the notorious 10% withholding tax on bet winnings. This tax, which saw its inception in 2023, had sparked more than a fair share of debates—some heated, some philosophical, yet all passionate.

A New Dawn: Taxes to be Abolished

Isn’t it perplexing how a minor percentage can stir such profound conversations? The idea of the ‘Betting Tax’ now meets its swift end. “Mr Speaker, we will abolish the 10% withholding tax on winnings from lottery, otherwise known as the ‘Betting Tax’,” announced Dr. Forson, his words promising relief for many.

Another unpopular levy, the E-Levy, meant to tax electronic money transfers at 1%, will also be abolished. In his calm, assured tone, he confirmed, “Mr Speaker, we will abolish the Electronic Transfer Levy (E-Levy) of 1%.” It’s a move aimed at easing modern modes of digital trade and interaction – a nod to the moving wheels of technology.

Furthermore, industries and automobiles will breathe a sigh of relief with the removal of the Emission Levy, enforced under the Emissions Levy Act, 2023 (Act 1112), a move that contradicts the notion of taxing growth itself. “Mr Speaker, we will abolish the Emission Levy on industries and vehicles,” he stated with hope interlaced in his voice.

Relief and Beyond: Impact of Tax Removals

These announcements are not just fiscal policies but shifts aimed at significantly alleviating the financial burden on households and businesses. There’s a deeper narrative of trust at play here—one that asks, can a government stride alongside its people in financial harmony?

The tax relief measures include the removal of VAT on motor vehicle insurance policies. “Mr Speaker, we will abolish the VAT on motor vehicle insurance policy,” declared Dr. Forson, emphasizing a stride towards making essential services more affordable.

Small-scale miners too find a new ally in the government with the abolition of the 1.5% withholding tax on the sale of unprocessed gold. “Mr Speaker, we will abolish the 1.5% withholding tax on the winning of unprocessed gold by small-scale miners,” he affirmed, acknowledging the gold mining sector’s significant role in the national economy.

Moreover, the COVID-19 levy, a necessity of a bygone crisis, will also see its end as part of broader VAT reforms later this year.

By abolishing these taxes, Dr. Forson emphasized the intended economic ripple effects—ease of financial burdens, increased disposable income, business growth support, and enhanced tax compliance. On a path less walked by many administrations, the reduction in the tax refund ceiling from 6% to 4% of total revenue is a strategic pivot, projected to save GH¢3.8 billion in 2025.

He noted confidently, “This amount is sufficient to cover the revenue shortfall from the removal of the E-Levy, which accounts for GH¢1.9 billion, and the Betting Tax, estimated at GH¢180 million.”

As we mull over these fiscal shifts, perhaps we should ask ourselves: do these measures craft a hospitable terrain for economic flourishment or merely a detour towards anticipations unmet? The answer lies buried among rising hopes and stringent realizations.

In concluding these announcements, we envisage not just figures on a ledger but a story seeking a harmonious rhythm for progress—a tale of economic resilience poised for its next chapter.