The Vice President, Dr. Mahamudu Bawumia says he will abolish the e-levy, emission tax and other taxes if elected President of Ghana.
He noted that this forms a significant part of his government's reforms to boost government revenues in a proposed tax reforms.
Delivering his policy statement and priorities to Ghanaians in Accra on Wednesday February 7, 2024, Dr. Bawumia said abolishing the e-levy which is tax on mobile money transactions will boost his bid for a cashless society.
"To move towards a cashless economy however, we have to encourage the population to use electronic channels payment. To accomplish this, there will be no taxes on digital payments under my administration. The e-levy will therefore, be abolished", he declared.
He further indicated; "My administration will introduce a very simple, citizen and business friendly flat tax regime. A flat tax of a % of income for individuals and SMEs, which constitute 98% of all businesses in Ghana, with appropriate exemption thresholds set to protect the poor."
Tax Regime
While lamenting the huge loss of government revenue, which he estimated to be a whopping $24 billion forming 13% of GDP because of several people outside the tax basket, Dr. Bawumia said his new revenue generation reforms will help boost both businesses and government revenues as well as reform the Ghana Revenue Authority (GRA).
"The current tax regime has been with us since independence and it has failed us."
"Many individuals and businesses find our tax system cumbersome and confusing and many feel harassed by the GRA."
"Many of the wealthy do not pay taxes, including property taxes. Too much discretion results in corruption. We want a regime that is easy to understand, easy to comply with and easy to enforce and that is not subject to so much discretion."
"To increase government tax revenue, we have to reform and refocus the Ghana Revenue Authority (GRA) towards broadening the tax base", he said.
Dr. Bawumia noted that the current tax system puts undue pressure on GRA staff to collect revenues and makes them focus on existing taxpayers.
"Sometimes, they even have to go to sit in people's shops to monitor sales, a process known as invigilation. In fact, many businesses feel harassed by this process and the constant audits of their operations. This has to stop!"
He continued; "We must strike the right balance between collecting revenue and allowing businesses to thrive. Our job is to protect the productive forces."
"Estimates suggests revenues amounting to 13% of GDP or $24 billion in 2023 are not collected because people are outside the tax net. Even collecting half of or a quarter of this annually will be a game changer for public finances", Dr. Bawumia added.
To achieve this, Dr. Bawumia stated his government will inculcate and enforce a culture of people filing their tax returns.
"Incentives must be provided to encourage people to file their tax returns even if they will pay zero taxes. We need a fresh start", he said.
Dr. Bawumia also indicated that he will abolish the proposed 15% VAT on electricity stating "it is still on our books by January 2025".
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