Gov't to lose GH¢7.7bn in 2025 if COVID-19 and E-levy is abolished — Tax consultant

The Ghanaian government stands to lose a substantial GH¢7.7 billion in revenue in 2025 if the COVID-19 levy and the Electronic Transfer Levy (E-Levy) are abolished, tax consultant, Francis Timore Boi has warned.

The COVID-19 levy, introduced as a temporary measure to cushion the economy during the pandemic, and the E-Levy, which was implemented to enhance revenue collection through electronic transactions, have both contributed significantly to the government's revenue stream.

The consultant warns that eliminating these levies could create a massive shortfall in government finances, potentially affecting critical sectors such as healthcare, education, and infrastructure development.

The GH¢7.7 billion figure, he said, comprises potential losses from both levies, adding that the E-Levy, which targets electronic transactions like mobile money transfers, has been particularly controversial but has also been a significant source of income for the government.

According to him, the COVID-19 levy, on the other hand, was intended as a short-term measure but has remained in place due to ongoing fiscal challenges.

Speaking to Joy Business, Francis Timore Boi warned that this could contradict the IMF programme aimed at improving revenue and redirecting government expenditure to critical areas to help alleviate poverty.

If any policy you seek to introduce may bring down revenue, the IMF may not be happy. 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, he said.

Stressing the need to assess such tax proposals, 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 added.

The flagbearer of the National Democratic Congress (NDC), John Dramani Mahama, as well as the flagbearer of the New Patriotic Party, (NPP), Dr Mahamudu Bawumia have reiterated their commitment to scrap the E-levy and the COVID-19 levy if elected as President.

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