President John Dramani Mahama has formally approved a bill that will see the abolition of several taxes, including the controversial Electronic Transfer Levy (E-Levy), the Betting Tax, and the Emissions Tax.
The move is a significant part of the Mahama administration’s broader policy to ease the financial burden on businesses and citizens.
The Electronic Transfer Levy, introduced in 2022 by the previous New Patriotic Party (NPP) government, had imposed a 1.5% tax on electronic transactions, including mobile money transfers, bank payments, and online transactions. Despite a reduction to 1%, the E-Levy faced widespread opposition from businesses, consumers, and political figures, who criticized it for discouraging digital transactions and unfairly affecting low-income earners.
During the presentation of the 2025 Budget Statement on March 11, Finance Minister Dr. Cassiel Ato Forson had declared the government’s intent to eliminate various “nuisance taxes” implemented by the former administration. He outlined several taxes that would be scrapped, including the E-Levy.
“Mr. Speaker, we will abolish the 10% withholding tax on winnings from lotteries, otherwise known as the ‘betting tax.’ We will abolish the Electronic Transfer Levy (E-Levy) of 1%. We will abolish the emission levy on industries and vehicles. We will abolish the VAT on motor vehicle insurance policies. And we will abolish the 1.5% withholding tax on the sale of unprocessed gold by small-scale miners,” Dr. Forson said during the budget speech.
Following Parliament’s approval on March 26 to repeal the E-Levy, the Mahama administration’s efforts to address tax-related challenges have been hailed by many. However, some economists have raised concerns over potential revenue shortfalls due to the removal of these levies. The government has reassured the public that measures will be put in place to manage any fiscal gaps. These measures include adjusting the tax refund ceiling and improving tax collection processes.
In the context of broader fiscal trends, government data shows that the COVID-19 Health Recovery Levy generated GH¢6.4 billion by the end of 2024, while the E-Levy accounted for GH¢246.9 million in revenue. Despite the tax reductions, the Mahama administration insists that its new tax policies will support the nation’s economic recovery without overburdening citizens.
With the formal signing of the bill, the government aims to provide relief to Ghanaians, particularly small businesses and low-income individuals, while ensuring a sustainable path to economic growth.
