How Scrapping E-levy, Covid tax will cause gov’t to lose GH₵7.7bn in 2025

Scrapping E-levy, COVID-19 levy will cause gov’t to lose GH₵7.7bn in 2025 

Both the National Democratic Congress (NDC) and the New Patriotic Party (NPP) have proposed the removal or scrapping of certain taxes imposed on the citizens of Ghana by the current Akufo-Bawumia Led Administration under the International Monetary Fund (IMF) programme, however, tax experts doubt the feasibility of this proposal.

It is to be noted that both political parties, NDC and NPP, have made a promise to remove the Electronic Transaction Levy AKA E-levy, the COVID-19 -Levy and reduce other taxes put on imported goods.

However one of such tax experts ,Mr. Francis Timore Boi, cautioned that the direct elimination of these taxes without any other alternative to generate revenue for the government can lead to the derailment of IMF’s programme.

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How much will the government of Ghana generate as revenue from COVID-19 levy and E-Levy in 2025

In an interview with Joy Business News, Mr. Francis Timore Boi revealed and argued that some taxes such as the COVID-19 levy and the E-levy have been estimated to generate more than GH₵7.7 billion next year for the government of Ghana.

The tax analyst questioned why alternative models haven’t been provided to generate revenue when these taxes are finally scrapped off.

He opined that there will be a major economy fall as a consequence of scrapping off the COVID-19 levy, E-levy, etc.

Mr. Francis cautioned that scrapping off the E-levy, Covid-19 levy and other taxes at the port could breach the deal with IMF’s programme aimed at improving government’s revenue and allocating monies and resources to important areas to help reduce the poverty rate in the country.

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“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”.

Stressing the need to assess such tax proposals, Mr Timore Boi said the political parties must provide a workable budget that will provide a foresight of how the revenue shocks that will be created will be remedied.

“It is important because the budget has not shown us that you are going to introduce new taxes”.

He further agreed that even though Ghanaians’ general sentiment is that the E-levy, and Covid-19 levy should be scrapped off, there must be an engagement and economic plan to fill that lose that would come if these taxes are finally removed.

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