Executive summary

On 24 July 2025, Ghana's Minister for Finance and Economic Planning (the Minister), presented to Parliament the Mid-Year Fiscal Policy Review of the 2025 Budget Statement and Economic Policy of the Government of Ghana (GoG) on the authority of the President of the Republic in accordance with Articles 179 and 180 of the Constitution, 1992.

The Minister provided updates on the tax policies implemented thus far and on ongoing tax initiatives flowing from the 2025 budget statement presented to Parliament in March 2025. He also touched on new tax policies to be introduced and similar regulatory enforcement plans.

Specifically, the Minister provided updates on the: earlier-proposed Value Added Tax (VAT) reforms; introduction of new tax policies including proposed customs reforms to address customs revenue shortfalls; withdrawal of tax exemptions on marine gas oil to curb smuggling; and enforcement of the prohibition on pricing and awarding contracts in foreign currency

(For background on the 2025 Budget proposals, see EY Global Tax Alerts, Ghana's finance minister presents 2025 budget statement and economic policy for FY2025 with tax implications, dated 14 March 2025, and Ghana's Parliament amends tax laws following the 2025 budget statement presentation, dated 9 April 2025.)

Detailed discussion

Updates on implemented tax policy proposals in the 2025 budget statement

The following tax policies proposed in the 2025 budget statement had been implemented as of the time of the Minister's reading of the mid-year budget statement:

• Abolishment of the following taxes:
• 10% withholding tax on lottery winnings
• 1% Electronic Transfer Levy
• Emission levy on industries and vehicles
• Valued-Added Tax (VAT) on motor vehicle insurance policies
• 1.5% withholding tax on small-scale miners' unprocessed gold "winnings"
• Reduction of the tax refund ceiling from 6% to 4% of tax revenue
• Upward revision of Growth and Sustainability Levy (GSL) for gold mining companies from 1% to 3% of gross production
• Extension to 2028 of the sunset clause for the Special Import Levy
• Restructuring and consolidation of existing levies under the Energy Sector Levies Act, 2015, Act 899 (as amended) which has seen a consolidation of Energy Debt Recovery Levy, Energy Sector Recovery levy (Delta Fund), Sanitation and Pollution Levy and Price Stabilisation and Recovery Levy called the Energy Sector Shortfall and Debt Repayment Levy (ESSDRL)
• In June 2025, a further amendment introduced a one Ghanian Cedi (GHS1) levy per liter of petroleum products to raise additional revenue to support the payment of energy-sector shortfalls, reduce energy-sector legacy debt and stabilize the power supply, according to the Minister.

Ongoing tax policies proposed in 2025 budget statement

VAT reform update

Building on the 2025 Budget's commitment to a comprehensive VAT reform, the GoG has concluded engagements for technical assistance with the International Monetary Fund (IMF) and is set to:

• Conduct nationwide consultation with businesses and stakeholders, expected to conclude by September 2025
• Prepare a new VAT Bill by October 2025 and submit it to Parliament as part of the 2026 Budget Statement

Though the final shape of the reform remains subject to consultation, the Minister indicated that taxpayers should expect the following as a minimum outcome:

• Abolition of the COVID-19 levy
• Single, reduced effective VAT rate
• Removal of cascading effect of the National Health Insurance Levy (NHIL) and Ghana Education Trust Fund Levy (GETFL)
• Removal of VAT flat rates and the implementation of a unified VAT rate
• Higher registration threshold for small businesses
• Introduction of fiscal electronic devices to improve compliance

Once this reform is concluded and passed into law, it is generally expected to result in a reduction in the compliance burden of VAT-registered taxpayers and a general reduction in the prices of goods and services.

New tax and other regulatory policies introduced

Withdrawal of tax exemptions on Marine Gas Oil (MGO)

To curb smuggling and reclaim lost revenue, the Minister indicated that the GoG will withdraw the tax exemptions on MGO previously granted to non-artisanal fishing fleets (i.e., commercial fishing).

Operators of non-artisanal fishing fleets will now pay tax on MGO, reducing the incentive for diversion into the open market and bolstering customs revenue.

Further, the cost of doing business for operators of non-artisanal fishing fleets is expected to increase due to the likely impact on the price of fish and other catch.

Reinforced customs and excise controls

In response to a GHS1.6b shortfall in customs revenue in the first half of 2025, the Minister announced enhanced administrative measures, including:

• Adoption of AI-driven risk assessments for origin, classification and valuation of imports
• Roll-out of the Advanced Cargo Information (ACI) system for pre-arrival shipment data
• Robust anti-smuggling surveillance program across land and maritime borders
• Review and decentralization of Customs operations to improve transparency

Importers are expected to have tighter pre-arrival vetting processes and limited avenues for amending Customs documentation. Compliance costs may increase slightly, but illicit leakages should shrink, improving overall trade fairness within the market and boosting government revenue.

Pricing and award of contracts in foreign currency

According to the Minister, the pricing of goods and services in foreign currency poses significant risks to Ghana's fiscal management and currency stability, leading to potential inflation and erosion of confidence in the national currency.

To address this, the President has mandated that, starting 24 July 2025, all government contracts must be denominated in local currency. Additionally, the public is reminded that the Foreign Exchange Act, 2006 (Act 723) prohibits pricing and payments in foreign currencies without authorization from the Bank of Ghana.

The change is expected to reduce pressure on the Ghanaian Cedi, especially considering the government's position as one of the largest consumers of goods and services.

Digitalization of tax administration

As part of the 2025 budget and mid-year review, GoG indicated its plans to optimize domestic revenue mobilization by, among other things, modernizing tax administration through digital technology or the use of artificial intelligence.

In view of the technology plans, the Ghana Revenue Authority introduced a dedicated Unstructured Supplementary Service Data (USSD) code to enhance seamless payment of presumptive taxes within the modified taxation framework. Additionally, the USSD platform has been fully operationalized for installment-based tax payments, reflecting the Ministry's commitment to utilizing technology for enhanced revenue collection. Further, a simplified and digitalized tax return form has been developed and implemented.

These changes are expected to simplify compliance and boost tax revenue collection from this largely untapped source of domestic tax revenue.

Overall implications

The proposed VAT reform, which includes the removal of the cascading effect of levies on taxable supplies, should have positive impact on the bottom line for businesses and reduce the cost of doing business in Ghana. Further, the adoption of technology in tax administration is expected to ease the way business is conducted with the tax authority. It is expected that enforcement of customs law at the ports will heighten considering the shortfall in customs revenue in the first half of 2025. The pricing and award of domestic contracts in the Cedi is expected to result in appreciation of the Cedi against major currencies, which should contribute to improved investor confidence and help ease inflationary pressures. However, multinational enterprises with domestic contracts already committed in foreign currency may be exposed to foreign-exchange risk that may require financial planning.