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President-elect John Dramani Mahama’s proposal to scrap the E-Levy and COVID-19 tax could result in a significant revenue loss of GHS 6.4 billion in 2025, raising concerns about Ghana’s fiscal sustainability under its current IMF-supported program.
The two levies, which are projected to generate substantial revenues, play a key role in stabilizing government finances amidst ongoing economic pressures. Government estimates indicate that the E-Levy alone is expected to bring in GHS 2.4 billion in 2025, up from GHS 2.1 billion budgeted for this year. Similarly, the COVID-19 Levy is projected to yield GHS 3.97 billion in 2025, rising from GHS 3.1 billion in 2024.
Combined, these tax streams are set to contribute an additional GHS 1.2 billion next year, underscoring their importance to Ghana’s revenue framework. Scrapping them, as proposed by the incoming National Democratic Congress (NDC) government, could create a significant budgetary shortfall that may undermine critical funding for key sectors.
Analysts warn that without clear alternative revenue-generating measures, the removal of these taxes may force the government to rely heavily on borrowing. This would exacerbate Ghana’s already precarious debt situation and increase economic risks.
The move has sparked debate over its feasibility, particularly as Ghana seeks to meet fiscal targets under the IMF program, which emphasizes sustainable revenue generation and debt management.
While Mahama’s proposal aligns with efforts to ease the tax burden on citizens, experts stress that careful planning and the introduction of alternative revenue streams will be crucial to avoid derailing the country’s fragile economic recovery.
Source:NKONKONSA.com
