As president, Bawumia plans to eliminate taxes such as e-levy, pollution, and betting.
If elected president, Dr. Mahamudu Bawumia, the vice president, has stated that, among other planned tax reforms, he intends to eliminate the emissions tax, the e-levy, and other levies to increase government revenue and promote a cashless society.
On Wednesday, February 7, 2024, in Accra, Dr. Bawumia gave a presentation of his government's policy statement and priorities to the people of Ghana. He emphasized that to achieve his administration's objective of encouraging digital financial transactions, it is crucial to do away with the e-levy tax, also referred to as the tax on mobile money transactions.
Dr. Bawumia expressed concern about the substantial revenue losses, estimated at $24 billion or 13% of GDP, resulting from numerous people and businesses operating outside the tax system. He outlined his reform agenda, which includes the elimination of taxes like the betting tax and the emissions tax to improve revenue generation and streamline the tax regime.
Dr. Bawumia said, "The current tax system, in place since independence, has proven ineffective." "It is overly complex and burdensome for individuals and businesses, leading to widespread non-compliance and evasion."
"To improve government revenue, we need to modernize and reorient the Ghana Revenue Authority (GRA) to broaden the tax base," he said.
Dr. Bawumia underlined the necessity of striking a balance between assisting business expansion and revenue collection, stressing the strain that monitoring current taxpayers places on GRA staff as well as the detrimental effects of frequent audits on operations.
"We estimate that approximately 13% of GDP or $24 billion in revenue was not collected in 2023 due to non-compliance," said Dr. Bawumia. "Even collecting a fraction of this amount annually would have a significant impact on public finances."
As part of initiatives to develop a culture of tax compliance and responsibility, Dr. Bawumia suggested incentives for filing tax returns, even for people with no tax burden.
In addition, Dr. Bawumia vowed to remove the proposed 15% VAT on energy tariffs by January 2025 if it is still in effect, demonstrating his dedication to reducing Ghanaians' tax burden.
He declared: "By achieving a fiscal deficit of 4.2% of GDP in 2023 with the policy measures put in place thus far, we have outperformed the IMF fiscal deficit target of 5% of GDP." The new policies I'm putting in place for 2025 will provide us the financial room to do away with some taxes, like the emissions tax, betting tax, and energy VAT (if it's still in effect), without sacrificing our deficit reduction goal.
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