The Electronic Transfer Levy (E-Levy), implemented in 2022 under the Akufo-Addo administration in Ghana, has been widely criticized and dubbed the “most hated tax” by Kofi Bentil, Vice President of IMANI Africa, a prominent policy think tank. The levy, a 1% charge on electronic money transfers excluding specific exemptions, was intended to boost domestic revenue mobilization. However, it quickly became a source of public discontent, perceived as an additional financial burden on Ghanaians already grappling with economic challenges. The levy’s unpopularity solidified its position as a central issue in the 2024 elections, with both major political parties pledging its removal.
The E-Levy’s introduction was part of a broader government strategy to increase revenue, but its implementation ignited significant public backlash. Many Ghanaians viewed the tax as an unnecessary imposition, adding to their financial strain. The public outcry transformed the E-Levy into a key political battleground, forcing both leading parties to acknowledge the widespread disapproval and incorporate its abolishment into their campaign promises. This political maneuvering underscored the levy’s impact on the national conversation and the electorate’s desire for its removal.
The 2024 elections saw the National Democratic Congress (NDC), led by former President John Dramani Mahama, return to power. Mahama’s campaign promise to abolish the E-Levy resonated with the electorate, contributing to his victory. Kofi Bentil, echoing the public sentiment, emphasized the widespread dislike for the tax and challenged the incoming administration to honor its commitment to repeal it. Bentil’s public statement amplified the pressure on the NDC to fulfill its promise, highlighting the E-Levy’s status as a litmus test for the new government’s responsiveness to public opinion.
Mahama, both during his campaign and after the election, consistently reaffirmed his pledge to eliminate the E-Levy. He criticized the previous administration’s fiscal policies, arguing that the levy disproportionately burdened businesses and households. Positioning the E-Levy as a symbol of flawed economic management, Mahama promised a more considered approach to fiscal policy, emphasizing efficiency, reduced waste, and tackling corruption. This narrative framed the E-Levy’s removal as a crucial step towards creating a more conducive economic environment.
Mahama’s proposed economic strategy centers on streamlining government spending, combating corruption, and broadening the tax base through a simplified Value Added Tax (VAT) system. This approach aims to enhance revenue collection without resorting to measures perceived as punitive, like the E-Levy. By promising to eliminate the E-Levy alongside other burdensome taxes, Mahama seeks to alleviate the financial pressure on businesses and households while simultaneously ensuring sustainable government revenue through more efficient and less contentious means. The emphasis on simplifying VAT collection further reinforces the commitment to a more streamlined and less burdensome tax system.
The E-Levy’s journey, from its inception as a revenue-generating measure to its role as a key electoral issue and its eventual slated removal, highlights the power of public opinion in shaping policy decisions. The widespread disapproval of the tax underscores the importance of considering the social and economic impact of fiscal policies. Mahama’s commitment to abolishing the E-Levy, along with implementing broader economic reforms, reflects a shift towards a more citizen-centric approach to fiscal management, prioritizing the needs of businesses and households while ensuring a sustainable economic future for Ghana. The E-Levy’s saga serves as a potent reminder of the need for government responsiveness and the potential consequences of implementing policies that disregard public sentiment.
