Government May Not Scrap COVID-19 Levy – Tax Analyst
By Rebecca Okine
Tax analyst and member of the Chartered Institute of Taxation Ghana, Francis Timore Boi Esq. has projected that government may not scrap the COVID-19 levy despite earlier promises, as economic pressures and critical projects continue to demand funding.
“These are huge amounts of money. I don’t think the government will take the COVID-19 levy off, even though they promised,” he said, citing revenue projections of GHS 2.93 billion for 2024, GHS 3.97 billion for 2025, and GHS 4.63 billion for 2026.
Speaking on Zed FM’s current affairs programme, The FOCUS, Mr. Boi suggested that instead of eliminating the levy, the government might rename it or repurpose it to support ongoing initiatives such as Agenda 111, which aim to build hospitals for the country.
Mr. Boi argued that the current government has already presented bills on the e-levy and betting tax to Parliament, however with the COVID-19 bill, they announced that they will present it later in the year as part of IMF structural reforms.
A survey conducted by the IMF, the Ministry of Finance, and the UK government recommended that the COVID-19 levy be made a deductible input for businesses. Additionally, former President John Mahama revealed that about $1.7 billion is needed to complete the Agenda 111 hospital project, further strengthening the case for maintaining the levy.
“If they are unable to raise money from somewhere, they will change the name so that they can raise funds to support Agenda 111,” Timore Boi suggested.
Speaking on the same issue, Dr. Jabir Mohammed, a senior lecturer and economist at the University of Ghana Business School, argued that the COVID-19 levy should have been structured as a general health emergency fund rather than a temporary measure.
“COVID-19 was a health emergency source of funding, I think the name of the levy should have been ‘Health Emergency Funding’ because the COVID-19 tag indicated that the levy was going to end after COVID.” Dr. Mohammed said, “But if the government had other focus for it, a change of name could have helped.”
He also emphasised the need for a dedicated source of funding for healthcare.
On the broader tax landscape, Dr. Mohammed predicted that the government might seek alternative ways to generate revenue.
“In no distant future, the government will come back and revise this levy. If not slapping back the e-levy, using some other means to generate money,” he stated.
The Electronic Transactions E-levy (e-levy) was initially introduced by the previous government to support initiatives such as the Free Senior High School, infrastructure development, and the Planting for Food and Jobs program, but fell short of revenue expectations.
“E-levy was projected to give us GHS 2.4 billion. The government estimated through town hall meetings that it was going to generate GHS 11 billion, yet after the first year, we had only GHS 640 million,” Mr. Boi revealed.
He also criticised the decision to tax financial services, arguing that such measures should focus on fees rather than the total amount involved.
“Financial services are critical; they are the lifeblood of the economy,” Mr. Boi said. “Even if you wanted to tax financial services, it is the fees we tax, not the actual amount.”
Data suggests that more people in the informal sector were affected by the e-levy than anticipated, raising concerns about its effectiveness and impact on financial inclusion.
While some have advocated for the COVID-19 levy to be redirected toward dialysis treatment and other healthcare services, experts suggest that the IMF may propose renaming it to sustain funding for Agenda 111 and other critical projects. As economic challenges persist, it remains to be seen whether the government will follow through on its promise to remove the levy or simply modify it to meet its fiscal needs.
