Tag: President John Dramani Mahama

Adnan Adams Mohammed

The Finance Minister designate, Dr Casiel Ato Forson, has assured Ghanaians that they can expect the first budget of the current administration – due in March 2025 and covering April to December –  to abolish electronic levy (E-levy), betting tax and the COVID-19 levy. He has insisted that those taxes are nuisance taxes of which he cannot easily identify their nature as to whether they are direct or indirect taxes.

The betting tax brings in less than GHC50 million annually Dr Ato Forson posited, pointing out that therefore such a tax, if scrapped, cannot significantly affect the country’s fiscal position.

Also, he explained that, the introduction of the E-levy fights the cashless economy agenda successive governments have tended to pursue. Therefore, the E-levy will be abolished in first budget within the 120 days of the social contract announced by President John Dramani Mahama as promised he said.

In support of the stance of the minister designate, former Director-General of the National Lottery Authority (NLA), Sammy Awuku, has expressed his excitement over the government’s decision to scrap the betting tax. The current Member of Parliament for Akuapem North on the NPP ticket described it as a counterproductive measure that has failed to yield positive results in other jurisdictions.

“I’m excited that the betting tax is going to be scrapped,” Awuku stated during an interview last week. “I’ve been consistent about it, even during the NPP era, and I said it is something that personally has not worked in many of the jurisdictions anytime you have introduced taxes on betting.”

Further expatiating his reasons for his position against the betting tax, the former NLA director said, “Lottery was part of the betting tax. The National Lottery Authority, for instance, is owned by the government, and apart from the things that they do, at the end of the day, they must also contribute to the national kitty” he explained.

This, he argued, created an unfair advantage for illegal betting operators, as players were more likely to choose operators who did not levy taxes on winnings.

“If the government is taxing itself, then what will happen is that the underground operators that we call the illegal operators will become emboldened,” Awuku continued. “If you play with the government, you attract a 10% tax on what you win. But if you play with the illegals, you get

your full money. So, I told them that, for me, it was counterproductive.”

Awuku also expressed concern over the initial stance of the Finance Minister-designate, who had previously advocated for an outright ban on betting and lottery activities. “

Meanwhile, the Member of Parliament for Tano North, Dr Gideon Boako, is cautioning the Mahama government against introducing alternative taxes in disguise following the resolve to scrap the e-levy and betting taxes, emphasising the potential implications of such a policy shift. Dr Boako believes it could result in significant revenue shortfalls that the government would struggle to address, arguing that, such shortfalls would conflict with the requirements of the International Monetary Fund (IMF), which demands robust revenue generation to meet debt servicing obligations.

“I think by and large, he [Ato Forson] has done his part, but unfortunately, it wasn’t enough,” Dr Boako stated. “For instance, he was asked how he plans to make up for the revenue shortfalls from scrapping the taxes, and he said he would cut expenditure. However, cutting expenditure does not address the problem because the IMF focuses on debt service to revenue ratio, not debt service to expenditure ratio,” he said.

The former economic advisor to the at the vice president office further explained that while expenditure cuts might offer temporary relief, they do not resolve the fundamental issue of generating enough revenue to match debt servicing obligations.

He warned that the IMF would ultimately insist on finding new sources of revenue, which could lead to the introduction of additional taxes.

“We don’t want a situation where you give with the right hand and take with the left hand,” he remarked, urging policymakers to consider the long-term impact of their decisions.

He called for a more comprehensive approach to addressing Ghana’s fiscal challenges. He cautioned against creating false hope by abolishing taxes only to replace them with alternative levies, urging the government to be transparent and pragmatic in managing the country’s revenue needs.