A KPMG-UNDP post-budget report has highlighted how key tax reforms in 2025 can affect growth and productivity in the economy.

According to the budget highlights, tax reforms in the 2025 budget including the betting tax, E-Levy and the Growth and Sustainability Levy are recipes for economic development.

The Minister of Finance, Dr Cassiel Ato Forson, announced the adjustment of the personal income tax-free threshold of resident individuals from GH¢490 to approximately GH¢539.

KPMG said: “Adjusting the tax-free threshold of the personal income tax band to reflect the minimum wage increase aligns with the principle of progressive taxation. This provides relief to low-income earners and indirectly increases their disposable income.”

On the Growth and Sustainability Levy the government proposed to increase the rate from 1% to 3% on gross production of mining companies to benefit from the sustained increase in global gold prices.

However, KPMG said: “The proposed GSL adjustment is to enable the government to have a greater share in the windfall revenues accruing to players in the industry.

"Although this is expected to bring in additional revenue to the Government, some of the players in the industry have stability clauses in their development agreements that protect them from adverse tax changes. To maximize the revenue potential from this proposal, there should be extensive stakeholder engagement,” it added.

Also, the proposal to extend the GSL and SIL yet again, potentially undermines the concept of certainty of tax policy.

To bring more certainty to tax policy, it will be imperative to consider more permanent proposals. This will allow taxpayers to plan their tax affairs over the long term.

They added that abolishing the Emissions levy could increase the usage of electric vehicles in the country.

"Increasing citizen's preference for electric vehicles requires more than just making them affordable.

"Other factors, such as charging stations, readily available skilled labour for maintenance, and concessionary loans to finance purchases, must also be explored Combining these efforts could accelerate the transition to electric vehicles," KPMG's report noted.

SSD/KA

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