In a surprising turn of events, President-elect John Mahama has backtracked on his campaign promise to scrap the Electronic Levy (E-Levy) and other related taxes introduced by the Akufo-Addo-led government.
Incoming President, John Mahama, who had vehemently opposed the E-Levy and Covid taxes during his campaign, now claims that these taxes are tied to the International Monetary Fund (IMF) and cannot be scrapped immediately.
The E-Levy, which was introduced in 2022, is a 1.5% tax on electronic transactions, including mobile money transfers, bank transfers, and merchant payments.
The tax was met with fierce resistance from the opposition National Democratic Congress (NDC), which argued that it would disproportionately affect low-income earners and small businesses.
John Mahama, who was the NDC’s flagbearer, had promised to scrap the E-Levy and other nuisance taxes if he won the election within his first 90days.
However, it now appears that John Mahama’s administration will not be able to fulfill this promise immediately.
Addressing a forum, Mr Mahama said, the E-Levy and other taxes are part of the IMF’s conditionalities for Ghana’s economic bailout program.
The e-levy was never tied to the IMF conditionalities as it was proposed by the previous finance minister, Ken Ofori-Atta before signing up to the IMF deal.
This means that the taxes will have to be “neutralized” before they can be scrapped.
The news is likely to come as a disappointment to many Ghanaians who had hoped that the new administration would provide relief from the burdensome taxes.
The E-Levy, in particular, has been criticized for its impact on the poor and vulnerable.
It remains to be seen how Mahama’s administration will navigate this complex issue and balance the need to fulfill its campaign promises with the requirements of the IMF program.
-BY Daniel Bampoe