The Minister of Finance, Dr. Cassiel Ato Forson, has announced a reduction of the current tax refund ceiling by 2 percentage points (from 6% to 4%) of Total Revenue as defined in Section 69 of the Revenue Administration Act, 2016 (Act 915).
He said by reducing the ceiling on the tax refund from 6% to 4%, Ghana will save GH¢3.8 billion.
According to Dr Forson, this amount is enough to close the revenue shortfall from the removal of the E-Levy amounting to GH¢1.9 billion and the Betting Tax, GH¢180 million.
Presenting the 2025 Budget in Parliament on Tuesday, March 11, the Finance Minister said the Tax Refund Account has been abused in recent years.
He said, “A study on the use of the tax refunds in the last eight (8) years revealed that GH¢ 29.11 billion had accrued to the tax refund account with only 12.5 billion, representing 43% of the total accrued amount, is used for tax refund purposes”.
“The study also revealed that GHS16.6 billion, representing 57% of the total amount accumulated in the tax refund account was misapplied, which is a total violation of the Revenue Administration Act, 2016 (Act 915) and the Public Financial Management Act, 2016 (Act 921)”
This implies that “there were virtually no tax refund arrears over the period”, he revealed.
The need to reduce the current tax refund ceiling by 2 percentage points to make up for shortfalls that will come about as a result of the cancellation of some nuisance taxes like the E-Levy and the Betting tax.