Finance Minister-designate commits to abolishing ‘nuisance’ taxes …while boosting revenue to 18%

Finance Minister designate, Dr. Cassiel Ato Baah Forson, has stated that the new government will uphold its promise to abolish what it previously referred to as “nuisance” taxes introduced by the former New Patriotic Party (NPP) government.

During their time as the Minority in Parliament, the National Democratic Congress (NDC) had resolved to eliminate taxes such as the betting tax, the Covid-19 levy, and the electronic communications levy upon assuming leadership in Parliament.

Appearing before Parliament’s Appointment Committee on Monday, Dr. Forson expressed his vision to increase tax revenue from 13.8% to 16–18%, enabling Ghana to align more closely with its peers.

He emphasized that achieving this goal does not necessitate increasing taxes, noting:

“Yes, we have announced that we are going to scrap certain taxes, and we will stick to just that.”

“It does not mean we don’t care about revenue; we care about revenue, and we will mobilize it. However, some of the taxes currently in place are not generating the expected revenue.”

For instance, the betting tax is bringing in less than 50m Ghana cedis a year, it is “nuisance tax, scrapping 50m Ghana cedis will not mean anything that will affect the economy.”

As the country faces double-digit inflation presently at 23.8percent [for December 2024], the Finance Minister designate, indicated that it is imperative to “immediately work” to bring inflation down and as such the new government has set a target of reducing inflation to 8percent to spur growth in the real sector of the economy. 

“I believe with robust measures, particularly on expenditure control, we can achieve an inflation rate of 8% plus or minus two. This will enable us to reopen the domestic bond market and reduce over-reliance on the treasury bill market.”

Tackling wasteful spending

Dr. Forson underscored the need to eliminate wasteful government spending, promising to lead efforts in this direction.

“My approach will prioritize reducing wasteful expenditure. We can not rely on continuous borrowing. It’s time to make tough decisions and ensure we operate within our financial means,” he said, calling on Parliament to support his initiative.

Engaging Development Partners

To address Ghana’s fiscal challenges, Dr. Forson proposed collaborating with development partners such as the African Development Bank, World Bank, European Union, and other bilateral agencies. He also indicated the possibility of working with the International Monetary Fund (IMF) if necessary to secure affordable financing.

“If required, we will engage our development partners to access cheaper financing options, particularly for expenditures that foster sustainable and inclusive growth,” he concluded.

By Eugene Davis, PARLIAMENT HOUSE