Daniel Nuer, the Acting Director of the Ministry of Finance’s Revenue Policy Division, has shared during the UK-Ghana Chamber of Commerce (UKGCC) and PwC Ghana’s webinar on “Tax Updates in Ghana’s 2025 National Budget”, that economic, administrative, and political economy reasons played key roles in the tax measures proposed in Ghana’s 2025 National Budget.
The government, under direct tax measures, sought to increase the monthly equivalent tax-free chargeable income level for resident individuals from GHC490 to an estimated GHC540 and extend the Growth & Sustainability Levy (GSL) to 2028 for all eligible entities, as well as raise the GSL for gold mining companies from 1% to 3% of their gross production. The government also sought to remove the 1.5% withholding tax on unprocessed gold purchases from small-scale miners and eliminate the 10% tax on lottery winnings (which comprises betting, gaming, and games of chance).
Rationale behind proposed direct tax measures
Speaking on the increase in the tax-free individual chargeable income, Mr. Nuer indicated that the rationale was administrative, that is, to enhance the efficiency of the application and enforcement of the tax.
The individual tax rate has to undergo several iterations. We want to do our computations properly, so we don’t have a repeat of last year, where the addition of the upper rate was slightly different from what was charged at a certain point”, he remarked.
Regarding the removal of the 1.5% withholding tax on unprocessed gold purchases, Mr. Nuer explained that the rationale was to streamline the source of gold purchases and ensure the injection of additional forex into the Ghanaian economy.
The idea is to simply make gold purchases similar to what we have with the Ghana Cocoa Board where for small-scale miners, all gold purchases/exports from them would be done through the Gold Board.
It is expected that when this happens, we will be able to sell on the London market which we currently can’t, especially most of the small-scale miners, because the sales do not go through a process that allows us to do that.
This approach, therefore, widens the market and makes it more transparent, enables us to curb the smuggling of gold out of Ghana, gain billions in revenue, and stabilise the cedi,” he said.
While the removal of the 1.5% withholding tax on unprocessed gold was driven by the economy, the elimination of the 10% tax on lottery winnings, which might have seemed politically motivated on the surface, was also driven by the need to enhance its application.
It was easier to collect withholding tax on sports betting because the process is automated. Others were getting difficult to administer. We had to take it off the books for review because you don’t keep a thing going when it’s not fair to others,” Nuer added.
Widening the tax net: a missed opportunity?
Mary Darko, Associate Director – PwC Ghana, believed that the government “lost the opportunity to widen the tax net”, with the repeal of 1.5% withholding tax on unprocessed gold purchases from small-scale miners, and the elimination of the 10% tax on lottery winnings, including betting, gaming, and games of chance.
For those who are unregistered, this means they are now out of the tax net. It would be difficult for government to get them to comply with filing their taxes unless government puts in some more effort to ensure they are filing their taxes and complying. Gamblers are also off the hook unless government puts in some more effort to ensure they are filing their taxes and complying.”
She also called for further studies to determine the impact of the repeals.
Implication of proposed tax measures on businesses
Darko, however, lauded the increase in the taxable employment income, noting that it would bring employees some relief, and advised businesses to prepare for the change.
Once the law is amended, businesses would have to make changes to their tax table/formula to account for this minimum wage that has been exempted from tax.
She, however, saw no relief for registered small-scale miners regarding the repeal of the 1.5% withholding tax.
The 1.5% tax, which is only an advance tax, should not affect their tax compliance; they should still be complying.
The Growth & Sustainability Levy: Are we out of the woods yet?
According to Nuer, the Growth & Sustainability Levy was extended to 2028 and taxes raised for eligible entities because “we are still not out of the woods, and there is the need for us to contribute to raise the required revenue.”
While this does not come as a relief to impacted businesses, Mrs. Darko urged businesses to continue to be compliant and to expect the levy to be extended again come 2028 despite its sunset clause.
Nuer urged the public to visit the GRA and Ministry of Finance’s websites for updates on the tax measures.
Abeku Gyan-Quansah, Tax Partner at PwC Ghana, moderated the webinar which also discussed the policy rationale behind indirect tax measures such as the government’s proposed removal of VAT on motor vehicle insurance premiums, exemptions on pharmaceutical raw materials and essential imported medicines from VAT, the proposed removal of the 1% Electronic Transfer Levy (E-Levy) on electronic transfers, as well as the abolishment of the Emissions Levy, among others.