Dr. Bawumia Pledges to Scrap E-Levy by March 2025 and Introduce Major Tax Reforms

Vice President and New Patriotic Party (NPP) flagbearer, Dr. Mahamudu Bawumia, has vowed to abolish the controversial electronic levy (E-Levy) on mobile transactions by March 2025 if he is voted into office as president. This announcement was made during an interaction with the media in Accra on Sunday.

Dr. Bawumia also outlined plans to implement significant tax reforms, including a tax amnesty and the introduction of a flat tax rate, within the first three months of his administration. He emphasized the urgency of these reforms, stating that they are necessary to create a business-friendly environment, drive job creation, and promote economic transformation.

"The E-Levy will have to go by March as we present our first budget, given our focus on digitalization as we take off," Dr. Bawumia said.

Scrap It Now, Not Later

Introduced by the government in May 2022, the E-Levy has been a subject of widespread criticism. It was designed to generate revenue for government projects but faced resistance from both the public and political figures.

In response to Dr. Bawumia's recent statement, Economist and University of Ghana Professor of Finance, Godfred A. Bokpin, welcomed the proposal to scrap the E-Levy, calling it a "bold step." However, Prof. Bokpin noted that as Vice President, Dr. Bawumia has the influence to push for the removal of the levy now rather than waiting until he becomes president.

During a radio interview, Prof. Bokpin remarked that many experts had advised against the levy’s implementation, and now that it has proven ineffective, removing it is a logical step.

E-Levy a 'Goner' by March 2025

Dr. Bawumia assured journalists that his administration would move quickly to abolish the E-Levy if he takes office, and that the repeal would be part of the first budget his administration presents.

In addition to the removal of the E-Levy, Dr. Bawumia stressed that his government would prioritize business-friendly reforms, including a flat tax rate regime and a tax amnesty. These reforms are aimed at fostering business growth and job creation across the country.

NDC's Competing Promise

The opposition National Democratic Congress (NDC) has also made a similar pledge. NDC flagbearer John Mahama has committed to scrapping the E-Levy, the 10% betting tax, and the COVID-19 levy should he return to power.

Mahama criticized the governing NPP’s introduction of these taxes, arguing that they harm businesses, taxpayers, and the youth, particularly those engaged in betting due to unemployment.

“I will reiterate that we will remove the betting tax and the E-Levy,” Mahama said, adding that he would pursue alternative revenue sources such as property taxes.

Conclusion

As the 2024 elections draw closer, both major political parties are positioning themselves as champions of tax reform. Dr. Bawumia's promise to eliminate the E-Levy and introduce a more business-friendly tax regime, if fulfilled, could have significant implications for Ghana's economy and its citizens.