Joe Jackson Questions Feasibility of Mahama’s Tax Cuts Amid Revenue Concerns
Chief Executive Officer of Dalex Finance, Joe Jackson, has expressed skepticism about the financial viability of President-elect John Dramani Mahama’s campaign promise to abolish taxes such as the E-levy and Covid-19 levy.
Speaking on TV3 on Friday, December 13, Mr. Jackson questioned how the incoming Mahama administration would generate the necessary revenue for development after removing what he described as critical tax streams.
He noted that the pledge to scrap the e-levy, COVID levy, 10% betting tax, emissions levy, and import duties on industrial and agricultural equipment would create significant fiscal challenges.
“Let us not be mistaken, in 2025, we would have to look at how we are performing in terms of revenue because some of the items are going to go out.
“There has been a manifesto commitment to take out the e-levy, betting tax, the COVID levy and others. So, a lot of issues are going to come up, and I have no doubt in my mind that the challenge is going to be huge.
“Because, you say you are going to remove tax A, B, C, D. But where is the money going to come from?,” Mr Jackson quizzed.
Speaking further, Mr. Jackson also reflected on the daunting task ahead for President-elect Mahama, particularly in managing the economy amidst persistent fiscal challenges.
When asked why anyone would want to lead the country in 2025, he remarked, “Because somebody has to step up and rule, somebody has to step up and fix the country, somebody has to step up.”
Ahead of the elections, Mr. Mahama, the National Democratic Congress (NDC) Presidential Candidate, pledged to abolish what he termed as “nuisance taxes” within his first 120 days in office.
This promise has sparked debate over its potential implications for Ghana’s revenue base and economic recovery efforts.
Removal of Levies to Have Minimal Fiscal Impact
Meanwhile, Fitch Solutions, the research arm of Fitch Ratings, has said the removal of taxes such as the COVID Levy, E-Levy, 10% Levy on bet winnings, and the emissions levy will have minimal fiscal impact on the Ghanaian economy.
According to Fitch Solutions, this is because the combined revenue generated from the aforementioned taxes amounts to only 3% of total revenue.
Another reason for the minimal fiscal impact Fitch Solutions further notes is the commitment of the incoming administration to introduce alternative revenue-generating measures, including reducing tax exemptions and reviewing taxes on imports and the mining sector in line with fiscal consolidation objectives under Ghana’s IMF programme.
