Ato Forson: GHS16.6 billion tax refund was misapplied under Akufo-Addo’s 8 years
Finance Minister Dr. Cassiel Ato Forson has announced a reduction in the tax refund ceiling from 6% to 4% of total revenue as part of efforts to address revenue shortfalls.
Presenting the 2025 Budget Statement to Parliament on Tuesday, March 11, Dr. Forson revealed that an audit of the Tax Refund Account over the past eight years uncovered significant misapplication of funds.
Out of GH¢29.11 billion accrued to the account, he said only GH¢12.5 billion—43%—was used for actual tax refunds, while GH¢16.6 billion, representing 57%, was misapplied, violating the Revenue Administration Act and the Public Financial Management Act.
He stated that by lowering the tax refund ceiling, the government will save GH¢3.8 billion in 2025 alone.
This amount, he noted, will cover the revenue shortfall resulting from the removal of the E-Levy (GH¢1.9 billion) and the Betting Tax (GH¢180 million).
Dr. Forson emphasized that the government is committed to financial discipline and stopping the misuse of public funds, assuring Ghanaians that these measures will help close revenue gaps without imposing additional taxes.
“Mr. Speaker, the Tax Refund Account has been abused in recent years. A study on the use of the tax
refunds in the last eight (8) years revealed that GHS29.11 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). Instructively, there were virtually no tax refund arrears over the period. Therefore, we are reducing 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).
“Mr. Speaker, by reducing the ceiling on the tax refund from 6% to 4%, we will save GH¢3.8 billion. This amount is enough to close the revenue shortfall from the removal of the E-Levy amounting GH¢1.9 billion and the Betty Tax of GH¢180 million. Mr. Speaker, already we have saved GH¢3.8 billion for 2025 alone from only one source and this is enough to close the gap from the taxes that we have removed.”
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