Ministry of Finance shares policy rationale behind proposed tax measures in Ghana’s 2025 Budget

Daniel Nuer is the Acting Director of the Revenue Policy Division at the Ministry of Finance. He spoke during a webinar hosted by the UK-Ghana Chamber of Commerce and PwC Ghana. The topic was “Tax Updates in Ghana’s 2025 National Budget.” He explained that economic, administrative, and political reasons influenced the proposed tax measures.

The government plans to increase the monthly tax-free income for individuals. It will rise from GH¢490 to about GH¢540. Additionally, the Growth & Sustainability Levy (GSL) will be extended to 2028 for eligible entities. The GSL for gold mining companies will increase from 1% to 3% of their gross production. The government also aims to remove a 1.5% withholding tax on unprocessed gold purchases from small-scale miners and eliminate a 10% tax on lottery winnings.

Mr. Nuer discussed the rationale behind these direct tax measures. He noted that increasing the tax-free income level would improve efficiency in applying and enforcing taxes. He emphasized that proper computations are necessary to avoid past mistakes.

Regarding the removal of the withholding tax on gold purchases, Mr. Nuer explained it aims to streamline gold buying processes. This change should help inject more foreign exchange into Ghana's economy. By making purchases similar to those with the Ghana Cocoa Board, small-scale miners can sell their gold more effectively.

This approach could widen market access and reduce gold smuggling out of Ghana, potentially generating billions in revenue while stabilizing the cedi.

While removing this withholding tax was economically driven, eliminating the lottery winnings tax had its own rationale as well. Mr. Nuer stated that collecting taxes on sports betting is easier due to automation, unlike other forms which are harder to administer.

Mary Darko from PwC Ghana expressed concern over missed opportunities in widening the tax net with these changes. She noted that unregistered individuals would now be outside of taxation efforts unless further action is taken by the government.

Darko called for studies on how these repeals might impact compliance among gamblers and others affected by these changes.

She praised increasing taxable employment income as a relief for employees but advised businesses to prepare for adjustments in their tax calculations once laws change.

However, she pointed out that registered small-scale miners would not benefit from repealing the withholding tax since it was an advance payment.

Mr. Nuer mentioned that extending the Growth & Sustainability Levy until 2028 indicates ongoing revenue needs for government operations. Although this may not relieve impacted businesses, Darko urged them to remain compliant with regulations.

Nuer encouraged everyone to check updates on tax measures via GRA and Ministry of Finance websites.

Abeku Gyan-Quansah moderated this informative webinar discussing various indirect tax measures as well, including VAT removals and exemptions related to motor vehicle insurance premiums and essential medicines.