Ghana Presents 2025 Budget, Eyes Tax Reforms for Economic Stability. The Finance Minister, Dr. Cassiel Ato Forson, is set to present the 2025 Budget Statement and Economic Policy to Parliament today, outlining the Mahama administration’s fiscal strategy to address Ghana’s economic challenges.
The budget presentation follows a high-level economic summit that gathered leading experts and private sector stakeholders to deliberate on Ghana’s financial landscape.
With the government acknowledging the nation’s economic difficulties as a crisis, expectations are high that the 2025 budget will incorporate practical solutions proposed during the summit.
Key focus areas for the budget include macroeconomic stability, governance reforms, private sector-driven growth, structural economic adjustments, infrastructure expansion, and policies to enhance productivity, technology adoption, and human capital development.
Stakeholders anticipate bold public sector reforms to boost efficiency while encouraging greater private sector participation.
To restore macroeconomic confidence, the government is expected to unveil major tax reforms aimed at closing revenue loopholes, broadening the tax net, and implementing a credible medium-term expenditure framework to ensure adequate funding for critical projects before their commencement.
Tax System Overhaul for Growth
To drive sustainable and inclusive economic transformation, industry players are advocating for a review of Ghana’s tax system, particularly in the agricultural sector.
A more streamlined tax regime on agricultural inputs and outputs could enhance efficiency, reduce burdens on farmers, and stimulate sectoral growth.
Similarly, policies that address skill gaps in Ghana’s workforce must align with the country’s developmental goals. Experts urge the government to create tax incentives that encourage investment in skill development programs and job creation initiatives.
Infrastructure Financing and Taxation
A major concern remains Ghana’s infrastructure deficit. To address this, stakeholders are pushing for a structured approach to infrastructure financing through the Ghana Stock Exchange (GSE) and the Ghana Infrastructure Investment Fund (GIIF).
Additionally, revising pension fund investment regulations to align with long-term infrastructure projects is being considered to promote economic growth.
The budget is also expected to clarify plans for the restructuring of Ghana’s energy sector. This includes reforms to the Electricity Company of Ghana (ECG) to enhance operational efficiency, enforce cost-cutting measures, and attract potential private sector involvement.
Stakeholders also expect updates on negotiations with Independent Power Producers (IPPs) to lower power purchase costs and make electricity more affordable.
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Ghana Presents 2025 Budget: IEA Urges Government to Retain Betting Tax
In a separate development, the Institute of Economic Affairs (IEA) is urging the government to retain the Betting Tax, citing its dual purpose of revenue generation and discouraging excessive gambling.
This call comes just hours before the budget presentation, despite earlier indications that the Mahama administration plans to scrap the Betting Tax, alongside the E-Levy, COVID-19 Levy, and Emissions Tax.
The IEA, however, proposes that instead of outright removal, the tax should be reduced from 10% to 5% to strike a balance between revenue collection and industry regulation.
Ghana’s tax revenue-to-GDP ratio currently stands at 13-14%, significantly below the 20-25% average of middle-income nations. The IEA argues that eliminating the Betting Tax would further weaken Ghana’s revenue base, making it harder to meet fiscal targets.
To offset revenue losses from tax cuts, the think tank suggests plugging leakages through enhanced monitoring of trade mis-invoicing, tax exemptions, and transfer pricing abuses.
Additionally, it calls for increased digitization to improve tax compliance and a simplified tax structure to curb evasion.
Further recommendations include introducing an e-commerce tax to capture revenue from the digital economy and imposing a windfall tax on extractive industries, telecommunications, and banking institutions that generate excess profits.
Fiscal Discipline and Expenditure Management
Despite the need for improved revenue collection, the IEA warns that fiscal discipline is crucial to avoid unnecessary expenditure.
While advocating for a reduction in wasteful government spending, it stresses the importance of protecting critical sectors like health, education, and infrastructure.
The think tank also recommends increasing capital expenditure (CAPEX), which has declined to just 3-4% of GDP, a level considered insufficient for sustainable growth.
A progressive rise in CAPEX to at least 10% of GDP over the medium term is suggested to drive economic expansion, job creation, and improved living standards.
To ensure effective budget implementation, the IEA supports the establishment of an Independent Value-for-Money Department (IVMD), an initiative championed by President John Mahama.
By addressing inefficiencies, financial mismanagement, and inflated project costs, this department could save Ghana an estimated 3-4% of GDP—equivalent to the nation’s entire current CAPEX budget.
As Ghana awaits the official budget presentation, all eyes will be on the government’s fiscal policy direction and how tax reforms will be leveraged to stabilize the economy, improve public services, and create a more sustainable growth trajectory.
