You cannot scrap e-levy if elected President- Prof Gatsi tells Bawumia
Economist, Professor John Gatsi, says the Vice President, Dr. Mahamudu Bawumia, will not be able to scrap the taxes on electronic financial transactions(e-levy) if given the nod in 2024.
According to Prof. Gatsi, Dr. Bawumia’s promise to abolish the controversial e-levy is just a “political strategy.”
In a national address on Wednesday, February 7, the 2024 flagbearer of the New Patriotic Party (NPP), Dr. Mahamudu Bawumia promised to abolish the e-levy if elected president of Ghana.
Dr. Bawumia reiterated his stance against taxes on electronic financial transactions and also pledged to remove the tax on betting among others.
“To accomplish this, there will be no taxes on digital payments under my administration. The e-levy will therefore be abolished,” Dr Bawumia announced.
However, Professor Gatsi argues that the e-levy has evolved into a significant revenue source for the government, making its elimination challenging, especially amidst the country’s ongoing IMF bailout.
Prof. Gatsi asserts that the IMF might oppose its removal given that the bailout program extends beyond 2025.
He urged Dr. Bawumia to present alternative revenue strategies he intends to implement if elected.
“I believe that all these discussions are going to be centred on 2025, and it is just a political strategy to make Bawumia look good for the election because you have already created a revenue stream for this government, and the IMF program will not end in 2025.
“So, to say, you need the same level of revenue to sustain the program, I don’t understand how you will be able to take one revenue source from the kitty and remain sustainable in the eyes of the IMF.
“What Bawumia should be saying is that he will propose taxes A or B to replace the e-levy. If that is not what he is saying, then it is not something he can do, especially under the IMF programme.”
Revenue from E-levy
Data from the Ghana Revenue Authority (GRA) indicated that the Electronic Transfer Levy (E-Levy) implemented in May 2022 raked in ¢861.47 million as of March 2023.
The controversial levy in the first year of implementation at a rate of 1.5% accrued ¢614.57 million.
Subsequently, in the first three months of 2023, the levy brought in ¢246.9 million for the state.
According to the data from the GRA, the E-levy registered ¢53.58 million in revenue in the first month (May 2022) of its implementation.