Economist Dr Adu Owusu Sarkodie says the removal of key taxes in the 2026 budget has created a huge revenue gap, stressing that the now-abolished COVID-19 Levy was bringing in almost the same amount as Ghana’s total royalties from oil and gas.
Speaking on Joy News’ PM Express Business Edition, he broke down the numbers to show the scale of the loss.
He said the government is placing its hope on compliance at a time when major tax handles are being scrapped.
According to him, “It has already abolished the E-Levy, which was fetching the government around 2 billion over a little over GH¢2 billion.”
He added that the betting tax, which brought in “roughly about ¢300 billion,” has also been abolished.
Dr Sarkodie said the biggest blow is from the removal of the COVID-19 levy, which “next year was projected to rake in about ¢3 billion.”
He noted how significant that levy had become.
“Covid-19 was giving us almost the same amount as the total royalties from oil and gas. This year, total royalties from oil and gas are estimated to be ¢2.9 billion. Covid-19 levy will be giving us ¢2.8 billion.”
He warned that the combination of tax removals will sharply reduce revenue.
“So you’ve taken E-Levy ¢2 billion, we are going to take away Covid another close to ¢3 billion, that’s about ¢5 billion. So that will bring down your revenue.”
But he pointed out that the government believes it can still raise money.
“The government is saying that you can raise revenue. You can increase revenue by even abolishing taxes or reducing tax rates.” He explained the thinking behind that strategy.
“When you increase the base, if more people are paying, it’s better than a few people paying higher rates.”
According to Dr Sarkodie, this is the approach that will shape the fiscal outlook.
“So this government believes in bringing the rate down so that you get more people into the basket or the bracket to pay. That’s how they want, so it really focuses on compliance.”
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