Ghana’s Parliament has abolished several tax laws since 2024 – a decision which was carefully taken to enhance the tax system, lessen tax burdens on taxpayers and promote economic growth.
Some of the notable taxes which were abolished include:
COVID-19 Health Recovery Levy – a tax which was abolished to reduce the financial burden on individuals and businesses. This was also necessary since COVID-19 was no longer considered a public health emergency.
The abolition of the COVID-19 Levy is expected to return some GH¢3.7 billion to individuals and businesses in 2026 alone.
VAT Flat Rate: This was cancelled to unify the VAT regime and simplify compliance processes for taxpayers.
Electronic Transfer Levy (E-Levy): The abolishment of the infamous E-Levy is expected to significantly revive digital financial services, benefiting small businesses and individuals who rely on mobile payments for ease of use in daily transactions.
Emissions Levy: This levy was abolished as part of efforts to promote environmental sustainability.
VAT on Insurance: VAT on Insurance Services, specifically Life and Motor insurance, was also removed to make insurance more affordable and accessible to resident taxpayers.
Betting Tax: Indeed, the Betting Tax was also repealed to address critical governance concerns from the youth, to sanitise the gaming industry and to ensure responsible gaming among young adults.
Withholding Tax on Lottery Winnings: This tax was also cancelled to boost opportunities for young people in the gaming industry.
The benefits of annulling the various taxes are aimed at simplifying the tax administration system, improving compliance by reducing administrative burdens on businesses and individuals, promoting economic growth by stimulating sectors like gaming, insurance, and digital finance, and Enhancing Competitiveness by making Ghana’s tax system more attractive to investors.
The Value Added Tax Act, 2025 (Act 1151), has also introduced reforms, including a Unified VAT Rate of 15% on all taxable supplies, whilst the increased VAT registration threshold from GH¢200,000 to GH¢750,000 is also meant to benefit micro and small enterprises.
Indeed, the current VAT reform enables the GETFund Levy and NHIL to be deductible as input VAT. The cascading effect of this move is to reduce the cost of doing business, particularly for small businesses.
These tax abolitions were led by government to reduce the tax burden on citizens and residents, under the RESET Agenda.
The changes are equally expected to improve Ghana’s tax system, making it fairer, simpler, and more growth-oriented.
Taxation is a crucial aspect of any economy, and Ghana is no exception. The government’s ability to provide essential services and infrastructure relies heavily on the taxes paid by citizens and residents.
However, tax compliance remains a challenge in Ghana, with many individuals and businesses evading tax payments.
Currently, only about 29% of eligible taxpayers in Ghana pay VAT, with about 19% of eligible citizens paying Income Tax properly. The country is also able to collect only about 29% of income tax on imports through its customs division.
To address this issue, it is essential to promote citizens’ and residents’ participation in national development through taxation.
The importance of taxation
Taxes are the primary source of government revenue, accounting for over 60% of total revenue. These funds are used to provide essential services such as healthcare, access to justice, democracy, education, major infrastructure, and security for all citizens, businesses and residents.
By paying taxes, citizens contribute to the development of their communities and the country as a whole.
Key benefits of increased tax participation include improved revenue mobilisation for development projects, enhanced economic stability and growth, better public services and infrastructure and reduced tax burden on compliant taxpayers.
It also provides a complainant and committed taxpayer the opportunity to demand greater accountability from government without any form of guilt.
However, challenges to tax compliance, including limited awareness of tax obligations and benefits, limited access to tax services and support, perceived corruption and mismanagement of funds, still persist despite the importance of paying tax.
Conclusion
In conclusion, promoting citizens’ and residents’ participation in development through taxation requires a multifaceted approach.
By abolishing the taxes outlined above to address compliance challenges, simplify tax processes, and increase transparency, the GRA and its stakeholders, through the Sustained Tax Education Program, continue to encourage more Ghanaians to contribute their quota to the national development agenda.
As a taxpayer, it is imperative to double-check invoices when making any purchases to avoid being charged taxes which are no longer recognised by law.
It is time for citizens to recognise the importance of taxation and take ownership of their role in shaping Ghana’s future. Government has done its part to abolish some key and unfriendly taxes from our tax laws.
Business owners are cautioned to avoid charging taxes that are no longer required by law since same can be construed as illegitimate.
Citizens and residents are encouraged to stand up for Ghana and pay their respective taxes. Join the train and let us build the Ghana we want together. Know your taxes, pay your taxes and let us build Ghana together.
*******
Elsie Appau-Klu is a Lawyer and Technical Advisor to the Commissioner General of the Ghana Revenue Authority. She also serves as the National Coordinator for the Sustained Tax Education Program and as Chair of the Modified Taxation Scheme Implementation Committee.
DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.
DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.
Source: www.myjoyonline.com