President-elect John Mahama's recent statement has left many Ghanaians stunned. During his campaign, Mahama vehemently opposed the Electronic Levy (E-Levy) and Covid taxes, promising to scrap them within his first 90 days in office. However, he now claims that these taxes are tied to the International Monetary Fund's (IMF) conditionalities for Ghana's economic bailout program, making it impossible to abolish them immediately.¹
The E-Levy, introduced in 2022, is a 1.5% tax on electronic transactions, including mobile money transfers, bank transfers, and merchant payments. The opposition National Democratic Congress (NDC) fiercely resisted the tax, arguing it would disproportionately affect low-income earners and small businesses. Mahama, as the NDC's flagbearer, capitalized on this sentiment, promising relief from the burdensome taxes.
However, it appears that Mahama's administration will not be able to fulfill this promise immediately. The E-Levy was proposed by the previous finance minister, Ken Ofori-Atta, before Ghana signed up to the IMF deal, contradicting Mahama's claim that it's tied to the IMF's conditionalities. This means that the taxes will have to be "neutralized" before they can be scrapped.
Many Ghanaians are likely to be disappointed by this development, especially considering the E-Levy's impact on the poor and vulnerable. Mahama's administration will need to navigate this complex issue carefully, balancing the need to fulfill campaign promises with the requirements of the IMF program.
Mahama had promised to create a more business-friendly environment, free from "endless tax audits" and harassment by the Economic and Organised Crime Office (EOCO). He also pledged to cut down on excessive government expenditures and boost revenues by expanding the tax net. It remains to be seen how Mahama's administration will address the E-Levy issue and other economic challenges facing Ghana.
President-elect John Mahama's recent statement has left many Ghanaians stunned. During his campaign, Mahama vehemently opposed the Electronic Levy (E-Levy) and Covid taxes, promising to scrap them within his first 90 days in office. However, he now claims that these taxes are tied to the International Monetary Fund's (IMF) conditionalities for Ghana's economic bailout program, making it impossible to abolish them immediately.
The E-Levy, introduced in 2022, is a 1.5% tax on electronic transactions, including mobile money transfers, bank transfers, and merchant payments. The opposition National Democratic Congress (NDC) fiercely resisted the tax, arguing it would disproportionately affect low-income earners and small businesses. Mahama, as the NDC's flagbearer, capitalized on this sentiment, promising relief from the burdensome taxes.
However, it appears that Mahama's administration will not be able to fulfill this promise immediately. The E-Levy was proposed by the previous finance minister, Ken Ofori-Atta, before Ghana signed up to the IMF deal, contradicting Mahama's claim that it's tied to the IMF's conditionalities. This means that the taxes will have to be "neutralized" before they can be scrapped.
Many Ghanaians are likely to be disappointed by this development, especially considering the E-Levy's impact on the poor and vulnerable. Mahama's administration will need to navigate this complex issue carefully, balancing the need to fulfill campaign promises with the requirements of the IMF program.
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