Former Executive Vice President of Unilever Global Markets, Yaw Nsarkoh, has expressed reservations about tax reforms promised by Ghana’s President-elect, John Dramani Mahama. During his campaign, Mahama and the National Democratic Congress (NDC) signed a social contract with the people of Ghana, pledging to abolish certain controversial taxes, including the betting tax, e-levy, and COVID-19 and emissions levies, within his first 90 days in office. These pledges were particularly aimed at addressing youth dissatisfaction and creating economic relief for citizens.
However, Nsarkoh, a respected business executive, cautions that these promises may have far-reaching economic implications. In a recent social media post, he warned against what he described as “populist” policies, arguing that Ghana's already dire financial situation could worsen if these revenue streams are eliminated without viable alternatives.
“The revenue from the three targeted taxes amounts to GHS 1 trillion in 2024. That kind of fiscal hole cannot just be filled ‘from somewhere else.’ Tax policies should be scientifically modeled. Slow down on populism; we are bankrupt,” Nsarkoh stated emphatically in his post.
Mahama’s pledge to scrap the e-levy and betting tax was a significant part of his campaign strategy, resonating strongly with young voters who have criticized these taxes as burdensome. The e-levy, introduced as a digital transaction tax, and the betting tax, implemented to regulate and generate revenue from the growing gambling industry, have faced backlash for increasing the cost of living and limiting economic freedom.
Critics like Nsarkoh argue that while such policies may appear to alleviate public dissatisfaction in the short term, they could lead to long-term economic instability. The targeted taxes currently contribute significantly to Ghana’s revenue base, and eliminating them without a comprehensive replacement plan could widen the country’s fiscal deficit.
Economic analysts suggest that Mahama’s administration will face tough decisions on how to fulfill campaign promises while ensuring financial stability. The challenge lies in striking a balance between reducing the financial burden on citizens and maintaining the government’s ability to fund essential services.
As the NDC prepares to assume office, discussions on Ghana's economic trajectory remain a focal point. Stakeholders are urging the incoming government to adopt evidence-based approaches to tax reforms and to consider the broader implications of their policies.
This development highlights the complexities of governance in a financially constrained economy and underscores the need for pragmatic solutions to address both public concerns and fiscal challenges.
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