Dr. Cassiel Ato Forson
Minister of Finance, Dr. Cassiel Ato Forson, is set to present the 2025 Budget Statement and Economic Policy today, marking the first budget of the second term of the Mahama administration.
With tax cuts and economic restructuring high on the agenda, this budget aims to set the tone for the government’s fiscal direction.
The Finance Minister has already announced significant policy shifts, including the scrapping of the E-Levy, Covid tax, and other “nuisance taxes.”
Dr. Forson, during his vetting before Parliament’s Appointments Committee, assured Ghanaians that despite eliminating some taxes, the government has a robust plan to bridge the revenue gap.
He outlined an ambitious strategy to boost tax revenue from 13.8% to 18% of GDP without imposing new levies on the populace.
The controversial E-Levy and Covid tax, which have been widely criticised, will be among the first to go, he said.
“The noise with these taxes does not justify their imposition,” Dr. Forson stated, arguing that their removal would not negatively impact the economy.
More IMF Funding
As Ghana navigates economic recovery, the Finance Minister hinted that the government might seek additional funding from the International Monetary Fund (IMF) during the country’s ongoing three-year programme with the lender.
“We are committed to working with the IMF, but we also want to ensure that we can raise financing—additional finance—working with the IMF and other domestic and international partners,” Dr. Forson said ahead of a meeting with an IMF delegation currently in Accra.
Mahama’s Economic Vision
In his State of the Nation Address (SONA), President John Dramani Mahama acknowledged the economic difficulties facing the country.
He attributed the crisis to poor financial management and assured Ghanaians that his administration was determined to implement corrective measures.
“We cannot pretend that all is well. The economy has suffered severe setbacks due to poor management, and the evidence of financial indiscipline is overwhelming,” President Mahama stated.
“However, we are determined to turn things around. There will be no room for wasteful expenditure,” he stated.
Cost-Cutting Measures and Fiscal Discipline
The President disclosed that the Finance Ministry had been directed to slash non-essential spending as part of a broader economic prudence initiative.
He praised organised labour for agreeing to a 10% salary adjustment amid economic difficulties, and urged all Ghanaians to embrace fiscal discipline.
“This is a year of sacrifice, and I commend labour unions for their understanding and commitment. We must all tighten our belts to build the Ghana we want,” he said.
To further cut costs, the President announced plans to reduce the number of presidential staffers, reinforcing the government’s commitment to a leaner, more efficient administration.
“We cannot afford an oversized government that drains resources meant for national development,” President Mahama emphasised. “A smaller, results-oriented team will ensure efficiency and accountability.”
Expectations
Expectations are high as the Ghana Hoteliers Association calls for the merging of several taxes, including the National Health Insurance Levy (NHIL), VAT, and the GETFund Levy, into a single tax for the hospitality industry.
The Association believes that the current tax system, combined with rising inflation, unstable foreign exchange rates, and high utility bills, is putting heavy pressure on hotel businesses.
The industry leaders called on policymakers to tackle these economic issues to support the survival and growth of the sector.
The President of the Ghana Hoteliers Association, Dr. Edward Ackah-Nyamike, urged the government to take their concerns seriously in the 2025 budget.
“We have made our position clear over the years, so we hope to see a reduction in taxes and levies, with some completely removed as the government has promised. We also want policies to address inflation, exchange rate instability, and high utility costs, as these directly impact our businesses.
“If these issues are handled in a way that brings positive changes and helps our businesses thrive, we will be very happy. We have been pushing for a single tax for the hotel industry that will merge VAT, GETFund, NHIL, and other levies,” he said.
By Ernest Kofi Adu