IEA Urges Ghana Government to Retain Betting Tax with Reduced Rate in 2025 Budget
The Institute of Economic Affairs (IEA) is calling on the Ghanaian government to retain the controversial Betting Tax as part of the 2025 Budget, which will be presented by Finance Minister Dr. Cassiel Ato Forson in Parliament. Despite the administration’s plan to scrap the tax alongside others like the E-Levy and COVID-19 Levy, the IEA emphasizes the tax’s importance in generating revenue while also discouraging excessive gambling. However, the IEA proposes reducing the current 10% rate to 5% to strike a balance between these objectives.
Revenue mobilization remains a major concern for Ghana, with a tax revenue-to-GDP ratio significantly lower than its middle-income peers. The IEA recommends exploring new ways to expand the tax base, including reducing loopholes such as trade mis-invoicing and tax exemptions. The think tank also advocates for greater use of digital tools to improve tax compliance and a simplified tax structure to minimize evasion.
In addition to tax reform, the IEA proposes the introduction of an e-commerce tax and a windfall tax on companies in the extractive, telecommunications, and banking sectors. Despite these measures, the IEA acknowledges that Ghana’s small GDP limits the potential revenue from domestic taxes. It suggests renegotiating fiscal terms in the natural resource sector and developing value-addition strategies for long-term revenue growth.
The IEA also stresses the importance of fiscal discipline in government spending. It suggests gradually increasing capital expenditure (CAPEX) to at least 10% of GDP to drive economic growth and improve living standards. A key proposal is the establishment of an Independent Value-for-Money Department to address inefficiencies in public spending, which could potentially save Ghana up to 4% of GDP. The IEA aims for the 2025 Budget to mark a turning point in Ghana’s fiscal policy, focusing on both improved revenue collection and more efficient spending.
SOURCE: CITI NEWSROOM