The Member of Parliament of Tano North, Dr. Gideon Boako, is cautioning the John Dramani Mahama government against introducing alternative taxes in disguise following their promise to scrap the Electronic Transfer Levy (E-Levy) and the Betting Tax.
Speaking to the media on Monday, January 13, following the vetting of Minister of Finance-designate, Dr. Cassiel Ato Forson, Dr. Boako emphasised the potential implications of such a policy shift.
During his vetting, Dr. Ato Forson stated that the Mahama administration plans to abolish the E-Levy and Betting Tax in its first budget.
However, Dr. Boako criticised the approach, stating that it could result in significant revenue shortfalls that the government would struggle to address.
He argued that such shortfalls would conflict with the requirements of the International Monetary Fund (IMF), which demands robust revenue generation to meet debt servicing obligations.
“I think by and large, he [Ato Forson] has done his part, but unfortunately, it wasn’t enough. For instance, he was asked how he plans to make up for the revenue shortfalls from scrapping the taxes, and he said he would cut expenditure. However, cutting expenditure does not address the problem because the IMF focuses on debt service to revenue ratio, not debt service to expenditure ratio,” he stated, a report by myjoyonline.com has said.
Dr. Boako further explained that while expenditure cuts might offer temporary reliefs, they do not resolve the fundamental issue of generating enough revenue to match debt servicing obligations.
He warned that the IMF would ultimately insist on finding new sources of revenue, which could lead to the introduction of additional taxes.
“We don’t want a situation where you give with the right hand and take with the left hand,” he remarked, urging policymakers to consider the long-term impact of their decisions.
The Tano North MP also called for a more comprehensive approach to addressing Ghana’s fiscal challenges.
He cautioned against creating false hopes by abolishing taxes, only to replace them with alternative levies, urging the government to be transparent and pragmatic in managing the country’s revenue needs.
Meanwhile, watch Ato Forson speak about abolishing the the above taxes, below:
AE
