Ghana Risks Losing GH¢6.4 Billion In 2025 If E-Levy And COVID-19 Tax Are Scrapped, KPMG Analysis Reveals

A recent pre-budget survey conducted by KPMG, in collaboration with the United Nations Development Programme (UNDP), indicates that Ghana could face a revenue shortfall of approximately GH¢6.4 billion in 2025 if the Electronic Transactions Levy (E-Levy) and the COVID-19 Health Recovery Levy are abolished.

The survey reveals that over 50% of respondents advocate for the elimination of these levies, viewing them as impediments to financial inclusion and burdensome to low-income earners and informal sector activities. However, KPMG cautions that such tax cuts could significantly impact government revenue.

To mitigate the potential revenue loss, respondents propose several measures:

Enhancing Property Tax Collection: Implementing digital cadastral mapping and introducing tiered property rates to improve efficiency.
Broadening the Tax Base: Incorporating the informal sector into the tax system to ensure a more equitable distribution of tax responsibilities.
Leveraging Technology: Utilizing technological solutions to streamline tax administration and reduce leakages.
Expenditure Rationalization: Identifying and eliminating wasteful government spending to improve fiscal sustainability.

The survey also highlights optimism among respondents regarding the government’s 2025 policies, with 80% expressing confidence that the upcoming budget will drive economic recovery. Additionally, more than 70% anticipate that the successful implementation of a 24-hour economy could lead to job creation and increased prosperity.

KPMG emphasizes that while tax reliefs are desirable, careful consideration is necessary to balance them against potential fiscal challenges. The firm recommends that the government adopt a comprehensive approach, combining tax reforms with strategic expenditure management and technological advancements to achieve sustainable economic growth.