Minimal Impact on Public Finances from Removal of E-Levy and Covid Levy, Says Economist 

Economist Dr. Theo Acheampong has stated that the removal of the e-levy and Covid levy would have a minimal impact on Ghana’s public finances, emphasizing that the taxes together raised only GHS3.259 billion (approximately USD 296 million) in 2023, representing just 2.4% of total domestic revenue or 0.4% of the country’s Gross Domestic Product (GDP).

In a post on his X page, Dr. Acheampong explained that these two taxes—introduced to bolster government revenue—could easily be scrapped without severely affecting public finances. He added that the removal of these levies would bring significant relief to citizens and businesses alike.

“These two taxes can easily be scrapped. In my view, scrapping them would have a limited impact on public finances but bring significant relief to many citizens and businesses,” Dr. Acheampong wrote.

His remarks come in response to concerns about the pledge made by President-elect John Dramani Mahama, who has vowed to remove several taxes, including the e-levy, Covid levy, a 10% tax on betting, the emissions levy, and import duties on industrial and agricultural equipment, within his first 100 days in office. Mahama has argued that these taxes are burdensome to Ghanaians.

However, some analysts, such as Joe Jackson, CEO of Dalex Finance, have raised concerns about the potential consequences of scrapping these taxes. Jackson questioned how the incoming Mahama administration would generate sufficient revenue to fund development projects if these taxes were eliminated. Speaking on TV3 on December 13, Jackson pointed out the challenge of managing the economy in light of the tax removals, particularly with regard to the e-levy.

Dr. Acheampong, however, reassured that the e-levy and Covid levy contributed relatively small amounts to Ghana’s overall revenue. He noted that the e-levy raised GHS1.151 billion in 2023, while the Covid levy generated GHS2.108 billion. Combined, they accounted for about 3% of total domestic revenue, a sum comparable to what the International Monetary Fund (IMF) typically provides Ghana for completing a successful review under the current IMF program for 2023-2026.

Dr. Acheampong further emphasized that the removal of these taxes would provide substantial relief to the public, without causing significant harm to the government’s finances. He added that he would update the figures once data on the betting tax and emissions levy is available.