Keep the E-Levy – Prof. Adei Advises Mahama

Former Rector of the Ghana Institute of Management and Public Administration (GIMPA), Professor Stephen Adei, has urged the incoming Mahama administration to retain the controversial e-levy.

Prof. Adei emphasized that the e-levy is one of the easiest taxes to collect in Ghana, making it a practical and efficient tool for generating revenue. Speaking on TV3’s Hot Issues program on Sunday, December 22, he argued that scrapping the e-levy, as promised by President-elect John Dramani Mahama during his campaign, may not be in the nation’s best interest.

“They must carefully consider their promises, such as the taxes they are planning to waive. I would not have even promised to remove the e-levy,” Prof. Adei stated. “One of the very difficult things to do in a country like ours is getting people to comply with tax payments. In tax administration, if it costs more to collect money than what you are going to get, you better forget it. As for the e-levy, I would rather reduce other taxes and keep it because you must reduce taxes which are difficult to collect and maintain ones which are easier.”

Ahead of the 2024 general elections, President-elect Mahama pledged to abolish several taxes within his first 100 days in office, including the e-levy, COVID-19 levy, a 10% betting tax, emissions levy, and import duties on vehicles and equipment for industrial and agricultural use. Mahama argued that these taxes had imposed a significant burden on Ghanaians.

However, Prof. Adei warned against making drastic tax cuts without careful consideration, advocating for a more balanced approach to reforming Ghana’s tax system. He also stressed the importance of managing public expectations, highlighting it as a critical element of effective governance.

“One of the downfalls of Akufo-Addo was his inability to manage expectations,” Prof. Adei noted. “He promised things like making Ghana self-reliant to the point where we wouldn’t need aid, but now we are heavily borrowing. Expectation management is crucial in running a home, an organization, or a country. My advice to President-elect John Mahama is to prioritize managing the expectations of Ghanaians.”

Prof. Adei’s comments underline the challenges facing the incoming administration as it seeks to deliver on campaign promises while addressing Ghana’s fiscal needs. Retaining the e-levy, he suggested, could provide a reliable source of revenue to help stabilize the economy while broader tax reforms are undertaken.