By: Elsie Appau-Klu ESQ
Ghana’s Parliament has abolished several tax laws since 2024 – a decision, which was carefully taken to enhance the tax system, and 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 the 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 with the aim to unify the VAT regime and simplify compliance processes for tax payers.
Electronic Transfer Levy (E-Levy): The infamous E-Levy abolishment is expected to significantly revive digital financial services to benefit small businesses and individuals who rely on mobile payments for ease of payment on 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Betting Tax: Indeed, the Betting Tax was also repealed to address critical governance concerns from the youth and to sanitise the gaming industry and to ensure responsible gaming among young adults.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.
Benefits of annulling the various taxes, is aimed to Simplify Tax administration system, improve Compliance by reducing administrative burdens on businesses and individuals, Promote Economic Growth through stimulation of growth in 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 payment of taxes.
Currently only about 29% of eligible taxpayers population isin Ghana is paying VAT, with about 19% 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 revenue for the government, 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 leads to improved revenue mobilization 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, it is key that promoting citizens’ and residents’ participation in development through taxation, requires a multifaceted approach.
By abolishing these taxes outlined above as part of addressing the challenges to compliance, simplifying tax processes, and increasing transparency, the GRA and its stakeholders through the Sustained Tax Education Program, continues 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 recognized by law.
It is time for citizens to recognize 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 respected 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 ESQ is a Lawyer and Technical Advisor to the Commisisoner General of Ghana Revenue Authority.
She also serves as the National Cordinator for the Sustained Tax Education Program and Chairs the Modified Taxation Scheme Implementation Committee.
