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Ato Forson Outlines Bold Economic Reforms: Abolishing E-Levy, Betting Tax, and Prioritizing Fiscal Prudence |
Dr. Cassiel Ato Forson, Ghana's Finance Minister-designate, has unveiled a comprehensive and ambitious plan to steer the nation toward fiscal stability and economic growth. His agenda includes abolishing the controversial E-Levy and betting tax within 120 days of assuming office. During his vetting by Parliament's Appointments Committee on January 13, 2025, Dr. Forson detailed his vision, emphasizing prudent expenditure management, enhanced tax compliance, and sustainable fiscal policies.
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Abolishing the E-Levy: A Relief for
Ghanaians
One of the
standout pledges by Dr. Forson is the swift abolition of the Electronic
Transactions Levy, commonly known as the E-Levy. The E-Levy has been a point of
contention since its introduction, drawing widespread criticism from Ghanaians
who view it as an unnecessary financial burden during tough economic
times.
“As part of
our 120-day agenda, we will abolish the E-Levy,” Dr. Forson declared
unequivocally during his vetting. He explained that the levy, initially
implemented to boost government revenue, had failed to achieve its objectives,
instead fueling public dissatisfaction and reducing the use of digital payment
platforms.
The removal
of the E-Levy aims to ease the financial burden on citizens and promote a more
inclusive digital economy. Dr. Forson’s approach signals a shift in policy,
focusing on alternative methods of revenue generation that do not overburden
taxpayers.
Betting Tax: Scrapped for Economic
Progress
In addition
to the E-Levy, Dr. Forson has committed to scrapping the controversial betting
tax, a move he believes will not hinder the country’s economic progress. He
emphasized that eliminating the betting tax would have minimal impact on
government revenue and argued that the focus should shift to improving compliance
with existing tax laws.
“Scrapping
the betting tax will not affect the forward march of the economy,” Dr. Forson
stated. He further highlighted that increasing taxes is not the only way to
enhance revenue. Instead, he advocated for boosting compliance as a more
sustainable and equitable solution.
By removing
the betting tax, Dr. Forson aims to create a more supportive environment for
industries while encouraging better tax compliance across sectors.
Focus on Tax Compliance Over Tax
Hikes
A core
pillar of Dr. Forson’s economic strategy is improving tax compliance rather
than introducing new taxes or increasing existing rates. He argued that Ghana's
fiscal challenges cannot be resolved by tax hikes alone. Instead, efficient
revenue mobilization through compliance with current tax laws is key to
achieving sustainable growth.
“You don’t
have to increase taxes to increase revenue. What is important is to increase
compliance,” he emphasized.
Dr. Forson’s
plan includes modernizing the country’s tax collection systems, investing in
digital tools, and strengthening oversight mechanisms to ensure every citizen
and business pays their fair share of taxes.
Cutting Wasteful Spending: A Path to
Fiscal Prudence
Another
cornerstone of Dr. Forson’s agenda is tackling wasteful public expenditure.
During his vetting, he stressed the need for decisive action to stabilize
Ghana's economy through prudent management of government spending.
“It’s not
always about revenue, but expenditure,” he said, underscoring the importance of
cutting unnecessary costs and channeling resources into productive sectors of
the economy.
Dr. Forson’s
fiscal reforms aim to strike a balance between revenue mobilization and
expenditure control, ensuring resources are allocated efficiently to stabilize
inflation, create jobs, and maintain a stable exchange rate.
Medium-Term Economic Vision:
Increasing Tax-to-GDP Ratio
Dr. Forson
also outlined his medium-term economic goals, which include increasing Ghana's
tax revenue as a percentage of GDP from the current 13.8% to between 16% and
18%. This ambitious target is central to his strategy for fiscal sustainability
and reducing Ghana’s reliance on external borrowing.
Achieving this
goal will require a multi-pronged approach, including improved tax compliance,
reduced corruption, and enhanced efficiency in tax administration.
Free SHS Policy: Here to Stay
In response
to concerns about the continuity of the Free Senior High School (SHS) policy,
Dr. Forson assured Ghanaians that the initiative would remain intact under the
new government.
“Free SHS
has come to stay,” he declared during his vetting, reaffirming his party’s
commitment to the program. Dr. Forson described the Free SHS policy as a
significant milestone in Ghana’s educational journey, emphasizing its
importance in ensuring equitable access to education for all.
This
assurance comes amidst broader discussions on the country’s educational
policies and expenditure priorities. Despite fiscal challenges, the government
remains dedicated to maintaining Free SHS as a cornerstone of its agenda.
Domestic Debt Exchange Programme: A
Commitment to Resolution
Dr. Forson
addressed concerns surrounding Ghana’s Domestic Debt Exchange Programme (DDEP),
which was launched as part of efforts to restructure the country’s
unsustainable debt. While the initiative has faced backlash due to losses
incurred by creditors, Dr. Forson pledged to resolve the challenges and ensure
all repayments are made.
“We will do
whatever it takes to clear the harms that have been created as a result of the
domestic debt restructuring,” he promised.
Dr. Forson
detailed Ghana’s repayment obligations, which include GH¢12.6 billion in 2025,
GH¢15.7 billion in 2026, and GH¢53 billion in 2027. He also highlighted
challenges with Eurobond repayments, noting that $364 million had already been
paid, with an additional $1 billion due annually from 2026.
His
administration plans to implement measures to mitigate the negative impacts of
debt restructuring while ensuring a stable economic recovery.
No Immediate Plans for Additional IMF
Support
Dr. Forson
also clarified his position on Ghana’s relationship with the International
Monetary Fund (IMF), denying claims that he intends to request additional
financial support.
“I didn’t
say I was going to request additional finance from the IMF,” he said, calling
out inaccurate media reports. “What I said was that we could request additional
finance if the need arises.”
Dr. Forson
emphasized the importance of maintaining flexibility in managing Ghana’s
economic affairs and reassured the public that any decision to approach the IMF
would be based solely on necessity.
A New Path for Ghana’s Economy
Dr. Ato
Forson’s proposed reforms signal a bold and transformative approach to
addressing Ghana’s economic challenges. By prioritizing the abolition of
burdensome taxes like the E-Levy and betting tax, enhancing compliance, cutting
wasteful spending, and maintaining a commitment to key social programs like
Free SHS, his agenda aims to create a stable and inclusive economy.
His
medium-term vision of increasing the tax-to-GDP ratio, coupled with his focus
on fiscal prudence, demonstrates a clear commitment to sustainable economic
management. While challenges remain, Dr. Forson’s proactive and people-centered
approach offers a promising path forward for Ghana’s economy.
As he awaits
parliamentary approval, Ghanaians will be watching closely to see how his plans
materialize and whether his promises translate into tangible benefits for the
nation.
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