Senior Lecturer at the Ghana Institute of Management and Public Administration (GIMPA), Dr. Nyame Baafi, has cautioned the government against taking a populist approach to tax removal, warning of its potential impact on revenue generation and economic stability.
His remarks come amid the government’s pledge to scrap some levies, including the e-levy, COVID-19 levy and betting tax.
Speaking on Joy FM‘s Top Story on Monday, March 10, ahead of the budget presentation, Dr. Baafi highlighted that taxes such as the E-Levy, Covid levy, and betting tax contribute approximately GH₵ 6.8 billion to government revenue.
He questioned how the government plans to bridge this revenue gap if these taxes are scrapped, given their role in funding critical infrastructure projects, including the Agenda 111 project, adding that government is already constrained in terms of revenue, as seen in the annual budget statement.
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Dr. Baafi highlighted the importance of retaining these taxes, stressing that the betting tax and other levies are crucial for funding key government programmes.
“If you look at the Government of Ghana’s annual budget statement, you’ll notice that we are already constrained when it comes to revenue. So if we already have the betting tax that is already bringing in enough revenue to fund certain key policies and programmes of government, I think that government shouldn’t adopt the populist approach of actually removing the taxes which Ghana government actually needs,” he said.
He also pointed to recent Ghana Statistical Service data, which indicates a decline in the country’s debt-to-GDP ratio from approximately 80% in 2020 to 61%, alongside a GDP growth rate of 5.7%, warning that removing these taxes could reverse the macroeconomic gains achieved so far.
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