The government has outlined a series of revenue measures in the 2025 budget aimed at improving domestic revenue mobilization, easing the tax burden on citizens, and ensuring fiscal sustainability.
Presenting the budget before Parliament, the Finance Minister announced that the Public Utilities and Regulatory Commission (PURC) will implement a major tariff adjustment in the fourth quarter of 2025. The adjustment is expected to reflect increased capacity charges, additional liquid fuel costs, and changes in the supply mix. Additionally, the weighted average cost of gas will rise from $7.80 to $8.45, leading to higher income generation from the energy sector.
Tax Policy Adjustments to Boost Revenue
The minister highlighted several revenue-focused policies, including the removal of multiple taxes. These include the 10% withholding tax on lottery winnings, and the 1% electronic transfer levy (e-levy). The 1.5% withholding tax on unprocessed gold by small-scale miners, and the emission levy. The removal of these taxes is expected to increase disposable income for households. It is to support business growth while improving overall tax compliance.
To address concerns about potential revenue shortfalls due to these tax cuts, the government plans to amend the Revenue Administration Act, Act 915. This amendment will improve it’s net of tax refunds by 2%, equivalent to 0.3% of GDP.
Addressing Income Leakages
The Finance Minister also disclosed findings from a recent study on the tax refund account, revealing significant misapplication of funds. Over the past eight years, 29.1 billion Ghana cedis were allocated to the account, but only 43% of the amount was used for legitimate tax refunds, with the remaining 16.6 billion cedis misapplied. As a corrective measure, the government says it will reduce the tax refund ceiling from 6% to 4% of total earnings, a move expected to save 3.8 billion Ghana cedis in 2025 alone. This amount, the minister assured, will be sufficient to offset the revenue lost from the removal of the e-levy and betting tax.
Strengthening Non-Tax Revenue Streams
The budget also emphasized the need to strengthen non-tax revenue collection. The government plans to introduce a legal and regulatory framework to streamline non-tax revenue collection, enhance service delivery, and improve transparency. Additionally, local authorities will be empowered to collect property rates, ensuring a more effective revenue collection system at the municipal level.
VAT Reforms and New Income Strategies
The government is also set to undertake comprehensive VAT reforms to correct existing distortions in the system. The proposed changes include abolishing the COVID Levy, reversing the decoupling of the Ghana Education Trust Fund (GetFund) and National Health Insurance Levy (NHIL) from VAT, and increasing the VAT registration threshold to exempt micro and small businesses.
Furthermore, the government will work with the private sector to reintroduce road tolls using a technology-driven solution, ensuring a steady stream of revenue for road maintenance and development.
Revenue Projections for 2025
The Finance Minister revealed that total income and grants for 2025 are projected to reach 223.8 billion Ghana cedis, representing 17.2% of GDP—an increase from 186.5 billion Ghana cedis in 2024. This projection is largely underpinned by non-oil revenue measures expected to generate at least 0.6% of GDP. Meanwhile, total expenditure for 2025 is set at 269.1 billion Ghana cedis, reflecting a significant drop compared to the previous year.
The 2025 budget, the minister emphasized, is focused on closing income gaps, reducing fiscal leakages, and implementing strategic reforms to ensure sustainable economic growth.
