The 2025 budget has been praised for introducing a number of initiatives including tax relief measures aimed at easing financial pressures on businesses and individuals.
However, concerns persist over the feasibility of its ambitious revenue targets, modest economic growth projections, limited capital expenditure and the prevailing tax framework.
At a review organised by the Institute of Statistical, Social and Economic Research (ISSER), Director Professor Peter Quartey highlighted the mixed outlook presented by the fiscal plan.
For instance, tax measures could provide a boost to economic activity but government’s projected Gross Domestic Product (GDP) growth of 4 percent falls below the sub-Saharan Africa (SSA) average of 4.2 percent, raising doubts about the economy’s recovery prospects.
Government aims to increase total revenue collections by 20.5 percent in 2025. However, ISSER analysts remain sceptical – citing historical trends.
In 2024 government missed both revenue and expenditure targets, collecting only 15.9 percent of GDP in revenue instead of the projected 17.4 percent while expenditure reached 23.7 percent of GDP, surpassing the target of 21.5 percent.
On a similar tangent, tax experts at PricewaterhouseCooper’s (PwC) Ghana urged government to ensure efforts aimed at simplifying the Value Added Tax (VAT) system and reviewing tax exemptions are followed through, arguing that current complexities contribute to revenue shortfalls and compliance challenges.
Mr. Abeku Gyan-Quansah, Tax Partner at PwC, raised this concern at the PwC 2025 Budget Digest and underscored the need for clarity and efficiency in tax policies to enhance compliance and revenue mobilisation.
He expressed concern over the current VAT system’s complexity, noting that multiple tax layers create confusion for businesses and such complexity often leads to unintentional non-compliance.
“Many businesses may fail to adhere to VAT regulations not out of tax evasion but due to confusion about when and how different rates apply,” he said.
Consequently, he welcomed government’s plans to reform VAT – stating that simplification would enhance compliance and reduce administrative inefficiencies.
Beyond VAT, PwC raised concerns about inconsistencies in the tax exemptions regime.
Mr. Gyan-Quansah highlighted disparities in how exemptions are granted, particularly in the energy sector where some companies receive full tax waivers while others pay the full tax burden.
Tax exemptions cost the economy an estimated GH¢4billion annually, according to government reports. PwC further argued that a clearer and more structured tax policy is essential for long-term improvements.
