Removal of E-levy, Betting Tax poses risk to govt’s ability to achieve its revenue target – Deloitte
In its recent analysis of Ghana's 2025 Budget, Deloitte Ghana has raised concerns about the government's ability to meet its revenue targets following the proposed elimination of certain taxes, notably the Electronic Transaction Levy (E-Levy) and the Betting Tax. The professional services firm warns that removing these levies could result in significant revenue shortfalls, potentially hindering the government's fiscal objectives.
Potential Revenue Shortfalls
The government's decision to abolish the E-Levy, Betting Tax, and Emissions Levy is intended to alleviate financial burdens on citizens and stimulate economic activity. However, Deloitte cautions that such measures may lead to substantial declines in tax revenue. The E-Levy, introduced to generate additional income from electronic transactions, and the Betting Tax, aimed at the burgeoning gaming industry, have been significant revenue streams. Their removal without equivalent alternatives could impair the government's capacity to fund essential services and development projects.
Recommendations for Mitigation
To counteract potential revenue losses, Deloitte recommends:
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Stakeholder Engagement: Engaging with businesses and affected sectors to gain support and ensure compliance with new fiscal measures.
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Expanding the Tax Net: Focusing on the informal sector, which holds untapped revenue potential, by employing technology, enhancing tax education, and simplifying compliance procedures.
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Reintroducing Road Tolls: Implementing a technology-driven toll administration system to improve collection efficiency, provided a comprehensive cost-benefit analysis supports its viability.
Government's Revenue Projections
The 2025 Budget projects total revenue and grants of GH¢224.9 billion, an increase from GH¢186.6 billion in 2024. Tax revenue is estimated at GH¢181.6 billion, constituting approximately 80.7% of the projected total. Achieving these targets amidst the removal of key taxes presents a significant challenge, underscoring the need for effective implementation of revenue-enhancing measures.
Conclusion
Deloitte Ghana's analysis highlights the fiscal risks associated with abolishing the E-Levy and Betting Tax. While these measures aim to reduce financial burdens on citizens, they necessitate strategic planning and execution of alternative revenue sources to maintain fiscal stability and achieve the government's economic objectives.
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