Ghana’s IMF Programme at Risk over Abolishment of Key Levies – Tax Analyst warns

Tax analysts have raised serious doubts over the feasibility of the ambitious tax proposals outlined by Ghana’s two leading political parties, the New Patriotic Party (NPP) and the National Democratic Congress (NDC), particularly in the context of the country’s ongoing International Monetary Fund (IMF) programme.

Both parties have pledged to abolish the e-levy and the COVID-19 levy, alongside reducing certain port duties—a move that analysts warn could undermine the government’s fiscal stability.

Speaking in an interview, Francis Timore Boi, a seasoned tax analyst, cautioned that the removal of these levies, without a clear strategy to replace the lost revenue, could derail the IMF-backed fiscal consolidation efforts.

“The COVID-19 levy and the e-levy together are projected to generate around GHS 7.7 billion in 2025. The absence of this revenue stream could create significant fiscal gaps,” he remarked.

Mr Timore Boi further criticized the manifestos for their lack of alternative revenue measures, warning that the IMF may be reluctant to support policies that erode revenue without a compensatory framework.

“Any policy that threatens to reduce revenue without viable alternatives will likely face resistance from the IMF,” he added, stressing that a detailed, workable budget is essential to mitigate potential revenue shocks.

Despite acknowledging the e-levy’s unpopularity, Mr Timore Boi emphasized the necessity of a thorough discussion on how to address the fiscal shortfalls that would result from its elimination.

“It’s crucial to preemptively address the financial void that these tax cuts would create, rather than simply responding to public sentiment,” he concluded.

Source: Norvanreports