Lingering rumours of disagreements within the Economic Management Team of the government over the implementation of a number of tax policies, particularly the Electronic Transactions Levy (E-Levy), were given form on Wednesday when Vice President Dr. Mahamadu Bawumia promised to scrap the taxes if elected President.

He said under his watch, E-Levy and several controversial taxes imposed by the government, such as the 15% VAT on domestic electricity consumption, will be scrapped.

In a nationwide address, the flagbearer of the New Patriotic Party said he desires to make Ghana a cashless economy as soon as possible to foster economic growth and fight corruption, and thus need to encourage people to use more electronic channels of payments rather than discourage them.

“To accomplish this, there will be no taxes on digital payments under my administration. The e-levy will therefore be abolished,” Dr Bawumia announced.

Similarly, he announced that the latest additions, the Value Added Tax on electricity consumption and the Emissions Tax, will be scrapped through new tax policies he is proposing, which will see the reformation of the Ghana Revenue Authority, improve the tax regime, broaden the tax base and increase tax revenue.

Dr. Bawumia said estimates suggest that revenues amounting to 13% of GDP (or $24 billion in 2023) are not collected because people are outside the tax net and that even if half or a quarter of the amount is collected annually, it will be a game changer for public finances.

“With the policy measures implemented thus far, we have outperformed the IMF fiscal deficit target of 5% of GDP by attaining a fiscal deficit of 4.2% in 2023. The new policies that I am proposing to implement in 2025 will give us the fiscal space to eliminate some taxes such as the VAT on electricity, the Emissions Tax and the Betting Tax without compromising our deficit target.”

Surprise

Ahead of the NPP assuming power in 2017, Dr. Bawumia, then a running-mate, was vehemently opposed to overburdening Ghanaians with taxes and had been outspoken on the need to move the economy from one of taxation to production.

The administration took off with the removal of what it termed nuisance taxes, however, no sooner had the taxes been scrapped than new ones replaced them.

Matters came to a head when soon after he had spoken publicly against taxing electronic transactions in late 2021, the government introduced the same through the 2022 Budget presented by Finance Minister Ken Ofori-Atta, implementing it in May of the same year and claiming it stood as a game-changer to address national revenue collection shortfalls.

https://www.myjoyonline.com/my-new-policies-will-help-eliminate-vat-on-electricity-emissions-tax-and-betting-tax-dr-bawumia/

Many Ghanaians then found it justifiable to direct their bewilderment of what might have offset all the assurances, for the sharp U-turn. However, Dr. Bawumia, towards whom such queries were directed, maintained a stoic silence, raising rumours that he remained opposed to the policy but had been overruled by others within the EMC and the wider government.

For now, he says given the chance, (as the bus driver and not the bus conductor), those taxes will be off the books.

Organised Labour has already laced its boots for a nationwide demonstration on Tuesday, February 13, to protest the imposition as well as demand the removal of the 15% VAT on electricity consumption. Labour says the tax is inimical to the well-being of workers already under pressure from the harsh economic environment.

The government, late on Wednesday evening however, issued a notice to suspend the implementation of the tax to allow for consensus building on the way forward.