Plans to scrap betting tax, others in a bankrupt economy unjustifiable

Former Executive Vice President of Unilever Ghana and Nigeria, Yaw Nsarkoh has issued a stern caution to President-elect, John Dramani Mahama to tread cautiously with the promises to abolish some taxes.

In his own words, Yaw Nsarkoh believes these tax cuts are a “dangerous road to hell” although the promise is shrouded with good intentions.

John Mahama in the run-up to the 2024 Presidential Elections made a social contract with Ghanaians.

The social contract includes promises to scrap some controversial taxes implemented by the NPP administration under bizarre circumstances. These taxes include the E-levy, Betting Tax, COVID levy, and emissions levy.

John Mahama was even more specific that these taxes would be scrapped in his first 90 days to bring relief to individuals and Ghanaians.

This promise, especially the promise to scrap the betting tax resonated well with the youth engaged in betting hence resulting in their massive support for the former President’s bid for another term at the presidency.

But Yaw Nsarkoh cannot fathom why a “bankrupt” economy like that of Ghana would contemplate giving more tax cuts.

Ghana is grappling with significant financial stress, and Nsarkoh argues that abolishing key revenue-generating taxes, such as those targeted by Mahama, could deepen the economic crisis.

He pointed out that three of the targeted tax handles are estimated to generate GH¢6.4 billion by 2024.

Filling such a gap which will emanate from the elimination of such taxes is going to be a herculean task if not impossible in the short term.

“Revenue from the 3 JDM “targeted taxes” comes to GHC6,409mn in 2024. That kind of hole cannot just be filled “from somewhere else!” Slow down on populism, tax policies can be scientifically modeled. Do so. We are bankrupt,” Yaw Nsarkoh opposed in a series of posts on social media.

In view, such promises which were not only put forth by John Mahama but other candidates were populist and lacked any scientific backing. Nsarkoh warned that false steps in tax policy could exacerbate Ghana’s financial woes, urging new governments to slow down and consider the long-term implications of their decisions.

“Precipate & populist tax cuts, are a dangerous road to hell, one paved with several good intentions! New governments had better beware,” he noted adding that “on what econometric model, anywhere in this world, can the elimination/reduction of a betting tax be justifiable, in a bankrupt country? Don’t take false steps!! “

Yaw Nsarkoh joins a number of high-ranking figures and economists who have kicked against this scrapping of the betting tax and other taxes incurring the disaffection of patrons of betting, other individuals, and businesses impacted by these taxes.

President of IMANI Center for Policy Education, Franklin Cudjoe had earlier kicked against the scrapping of the betting tax but rather called for the rate to be reduced.

Director of the Institute of Statistical Social and Economic Research at the University of Ghana and a renowned economist, Prof. Peter Quartey has also shared similar sentiments insisting that it will be a misstep to scrap the betting tax among others.

With prominent figures raising concerns over these tax cuts, it is unclear how Mr Mahama will manage the expectations of the voters who welcomed the promises of tax cuts and these public figures kicking against the cuts.