Tax analysts have raised concerns about the ambitious tax proposals presented in the manifestos of Ghana’s two major political parties, the New Patriotic Party (NPP) and the National Democratic Congress (NDC).
These proposals, which include scrapping the Electronic Transaction Levy (E-levy), the COVID-19 Levy, and reducing some port taxes, are set to be rolled out under an International Monetary Fund (IMF) programme.
Francis Timore Boi, a tax analyst speaking to Joy Business, cautioned that the blanket removal of these taxes without alternative revenue strategies could jeopardize the IMF programme. He pointed out that the COVID-19 Levy and E-levy combined are expected to generate approximately GH₵7.7 billion for the government in 2025.
Mr. Timore Boi expressed concern over the absence of alternative revenue generation models in the parties’ proposals to offset the potential financial shortfall. He emphasized that this could conflict with the IMF’s objectives of enhancing revenue and prioritizing government expenditure to address poverty.
He further explained that any policy leading to reduced revenue might not align with IMF expectations, particularly as the COVID-19 Levy alone is projected to generate GH₵5.6 billion in 2025. Additionally, the E-levy is forecasted to contribute GH₵2.1 billion in 2025, increasing to GH₵2.4 billion in 2026.
“If any policy you seek to introduce may bring down revenue, the IMF may not be happy with that. You are planning to abolish the COVID-19 levy and the e-levy. COVID-19 levy alone in 2025 is estimated to bring in about GH₵5.6 billion. If you take it off, how are you going to replace it? In 2025, we are expecting E-levy to give us about GH₵2.1 billion and in 2026, it is projected to increase to about GH₵2.4 billion”.
The tax analysts stressed the importance of the political parties presenting a workable budget that outlines strategies to address the revenue gaps that would arise from the removal of these taxes.
“It is important because the budget has not shown us that you are going to introduce new taxes”.
He acknowledged the unpopularity of the E-levy but insisted that discussions are needed on how to compensate for the financial losses that its abolishment would create.
