The Institute of Economic Affairs (IEA) is urging the government to maintain the controversial Betting Tax, emphasizing its dual role in revenue generation and discouraging excessive gambling.
This appeal comes just hours before Finance Minister Dr. Cassiel Ato Forson presents the 2025 Budget in Parliament.
Despite the new administration’s pledge to scrap the Betting Tax alongside the E-Levy, COVID-19 Levy, and Emissions Tax, the IEA argues that the tax should remain—albeit at a reduced rate of 5% instead of the current 10%.
The debate over the Betting Tax comes at a critical time for Ghana’s economy, as revenue mobilization remains a major challenge.
In a statement issued on their expectations for the 2025 budget, the Institute explains that with a tax revenue-to-GDP ratio of just 13-14%, far below the 20-25% average of its middle-income peers, the country must explore innovative ways to widen its tax base and enhance collection efficiency.
To offset potential revenue losses from tax cuts, the IEA suggests plugging loopholes in the system, such as trade mis-invoicing, tax exemptions, and transfer pricing abuses. It also advocates for digitization to improve tax compliance and a more simplified tax structure to reduce evasion.
Additionally, it proposes the introduction of an e-commerce tax and a windfall tax on extractive industries, telecom companies, and banks that generate super-profits.
Despite these measures, the IEA warns that even with a stronger tax effort, Ghana’s small GDP—currently about GHS 1 trillion—limits the amount of revenue that can be generated domestically. It, therefore, calls for a renegotiation of fiscal terms in the natural resource sector to maximize state benefits, alongside value-addition strategies to boost long-term revenue streams.
However, with improved revenue collection, the IEA also warns that Ghana must take a more disciplined approach to spending. It notes that while cutting wasteful expenditure, the government must strike a balance to avoid harming essential sectors such as health, education, and infrastructure.
The IEA expects the 2025 Budget to mark a turning point by increasing capital expenditure (CAPEX), which has been cut to the bone at just 3-4% of GDP. It recommends progressively increasing CAPEX to at least 10% of GDP over the medium term to drive growth, create jobs, and improve living standards.
A key part of expenditure rationalization, the IEA argues, should be the establishment of an Independent Value-for-Money Department (IVMD), a proposal championed by President John Mahama.
The think tank estimates that addressing inefficiencies, diversions, and inflated costs through this department could save Ghana as much as 3-4% of GDP—equivalent to the entire current CAPEX budget.
