Ghana may face a significant revenue shortfall of GHS 6.4 billion in 2025 if the E-levy and COVID-19 tax are abolished.

Ghana may face a significant revenue shortfall of GHS 6.4 billion in 2025 if the E-levy and COVID-19 tax are abolished.

Ghana is facing a potential revenue crisis, with estimates suggesting that the country could lose GHS 6.4 billion in revenue in 2025. This significant shortfall is attributed to the proposed abolition of the E-levy and COVID-19 tax.

The E-levy, which imposes a 1% levy on electronic transfers, has been a contentious issue since its introduction. Despite efforts to reduce the rate, the levy has not been well received by the public. The COVID-19 tax, on the other hand, was introduced to help mitigate the economic impact of the pandemic.

The abolition of these taxes could have far-reaching consequences for Ghana's economy. The revenue generated from these taxes is crucial for funding critical sectors of the economy, including education, healthcare, and infrastructure development. Without these funds, the government may be forced to resort to borrowing, which could exacerbate Ghana's already unsustainable debt levels.

Experts have warned that the abolition of these taxes without a clear alternative revenue stream could undermine Ghana's economic stability. The country is already facing significant economic challenges, including high inflation, a large budget deficit, and a depreciating currency. The loss of revenue from these taxes could make it even more difficult for the government to address these challenges.

To mitigate the impact of the revenue shortfall, some experts have suggested that the government could consider reducing import exemptions. This could help generate additional revenue and offset the loss of revenue from the abolished taxes. However, this solution would require careful consideration and planning to ensure that it does not have unintended consequences for the economy.

In conclusion, the proposed abolition of the E-levy and COVID-19 tax in Ghana could have significant consequences for the country's economy. The government must carefully consider the potential impact of this decision and explore alternative revenue streams to ensure that critical sectors of the economy are not negatively affected.