Financial analyst Yaw Appiah Lartey has expressed concerns about Ghana’s heavy reliance on tax revenue and the challenges posed by removing certain taxes, such as the COVID-19 tax and the electronic levy (e-levy).
Speaking on Morning Starr with Lily Mohammed, Mr. Lartey said “We have to look beyond taxation,” urging the government to explore avenues for revenue generation outside of the traditional tax system. He also suggested that renegotiating Ghana’s International Monetary Fund (IMF) program could bring in additional funds to support the budget and other non-tax revenue streams.
However, he emphasized that any reduction in taxes creates a financial gap that must be filled through alternative revenue-generating measures.
Mr. Lartey explained that Ghana’s economy is heavily dependent on tax revenue, with 77% of the country’s total revenue coming from taxes. He warned that if the government moves forward with scrapping these taxes, they will need to introduce new policies to compensate for the loss, particularly through non-tax sources.
While Lartey acknowledged the importance of increasing national productivity as a long-term solution, he noted that the effort of the finance minister-designate to address non-tax revenues had not been convincing. He raised concerns that Ghana might end up simply replacing one tax with another, rather than addressing the structural revenue gaps in a sustainable way.
“We have to look beyond taxation so if we are going to scrap these taxes, they should be able to tell us that they are going to fulfill non-taxed resources including renegotiating the IMF programme which is likely to bring revenue or bring some money to support the budget. They can increase productivity across the country. The minister couldn’t convince us about some of the non-tax revenues. We are likely to be in a situation where we move one tax to replace another tax”.
