Fitch Solutions has questioned the incoming NDC government’s intention to abolish some taxes introduced by the outgoing NPP government, saying, such a move will affect the government’s fiscal consolidation programme.

According to the UK-based firm, the incoming government’s promise to abolish taxes such as the Electronic Transaction Levy, Emissions Levy and Covid-Levy is just a mere political rhetoric.

It believes the government will adopt a fiscal tightening this year to bring further stability to the economy.

Associate Director at Fitch Solutions, Mike Kruiniger, speaking at a recent webinar for Sub-Saharan Africa said Ghana is currently under an International Monetary Fund Extended Credit Facility, and the key target is to improve the country’s public finances and reduce budget deficits.

“Ghana is currently under an Extended Credit Facility with the IMF, and the key target is to improve the country’s public finances and reduce budget deficits. We anticipate a renewed focus on fiscal consolidation under a likely NDC government, despite rhetoric coming from the party that might suggest otherwise”.

“Indeed, John Mahama has indicated that he might renegotiate the terms of Ghana’s IMF programme, and if he does, he intends to revise policies introduced by the NPP administration, including the tax on electronic payments (E-Levy). While he will probably cut these taxes, the ones he seeks to target represent a very small portion of Ghana’s total public revenues accounting for less than 3.0%”, he explained.

“Therefore, we view the removal of these taxes as largely symbolic and political, rather than having a significant impact on Ghana’s fiscal standing”, he concluded.

On the renegotiation of the IMF Programme, Mr. Kruiniger said it’s highly unlikely the new Mahama government will engage any negotiation with the IMF that will jeopardise the relationship with the Bretton Woods.