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Tax reliefs provided for in the 2025 budget inspire hope to help reduce hardships on citizens and ease the high cost of doing business, the Institute of Statistical, Social Economic Research (ISSER) of the University of Ghana (UG) has said.
The research institute said the reliefs, including the removal of the 10 per cent withholding tax on winnings from betting; one per cent Electronic Transfer Levy (E-Levy); Emission Levy on industries and vehicles; VAT on motor vehicle insurance policy; and 1.5 per cent withholding tax on winning of unprocessed gold by small-scale miners inspired hope for citizens and businesses.
However, the institute said it was not sure whether the government would be able to meet its revenue target which had been increased by 20.5 per cent after implementing the reliefs.
“The budget inspires hope, especially for some of the tax reliefs; however, our low gross domestic project (GDP) projection which is below the Sub-Saharan African growth rate is a source of concern because we need to grow more to about eight per cent annually”.
“We are not sure whether the revenue target could be met given the reliefs provided. I like the idea about reset, but there is also the need to reset our mindset through civic education to reduce corruption and promote value for money,” the Director of ISSER, Prof. Peter Quartey, said at the institute’s 2025 Budget Review in Accra yesterday.
The budget review was conducted by 14 professors and doctors of the research institute.
The post-budget statement review provides an important platform for an objective and independent analysis of the government's account of national fiscal performance, educate the public, and proffer recommendations aimed at achieving stronger fiscal, social and economic outcomes.
The Director of ISSER said the 2025 budget was very ambitious with several tax reliefs to cushion taxpayers.
Prof. Quartey said policies in the budget that might benefit industry included removal of one per cent E-Levy, VAT on motor vehicle insurance and emissions levy.
He said the establishment of Gold Board and removal of 1.5 per cent withholding tax on unprocessed gold, amendment of VAT Regulations (LI 2255) to update the list of exempted raw materials for the pharmaceutical industry and exempted imported essential medicines were also crucial for the industrial sector.
“These are generally good initiatives, especially those targeting the gold sub-sector, which must be combined with a strong resolve to promote sustainable mining,” the ISSER Director said.
Prof. Quartey said an example was the exemptions provided to the pharmaceutical industries for the importation of raw materials to improve their competitiveness.
He added that an evaluation of progress made would be essential to back the proposal for further exemptions.
Prof. Quartey stated that policies that were likely to impact negatively on the operations of industries were increase in growth and sustainability levy from one per cent on the gross production of mining companies to three per cent and extension of the sunset clause to 2028.
“The extension of the sunset clause of the special import levy to 2028 may hurt industry, but they are needed to mitigate revenue losses associated with tax reliefs and incentives for the sub-sector,” he said.
The ISSER Director said the government should have continued the collection of taxes on betting winnings to generate revenue for youth development initiatives, rather than caving in to pressure.
“In 2021, we were told that road toll brings us up to GH¢72 million and betting tax about GH¢140 million. And so, it was surprising that we are reintroducing road tolls and abolishing betting tax,” he said.
Prof. Quartey said the government had made significant proposals to promote domestic value addition such as agro-industrial zones across all regions, small processing facilities for cassava, tomatoes, fruits and other products, cocoa processing plants in cocoa-producing areas, cashew processing factories in the Bono, Bono East and Ahafo regions.
He said those measures, when efficiently implemented, would help reduce imports, create jobs and boost economic growth while promoting domestic consumption and value addition.
The director said the reintroduction of road tolls was laudable, as there must be some payment for using roads to cater for their maintenance.
