2 new levies proposed by 2 ministers

In a week marked by mixed signals on fiscal policy, two ministers in the current government have proposed new levies to raise revenue for their respective sectors, even as Parliament scrapped taxes and levies that had generated over GH₵2 billion for the state last year.
This development has left many Ghanaians questioning the coherence of the government’s fiscal strategy, as the proposal of new levies contradicts the stated objective of reducing the financial burden on citizens.
It is now obvious to Ghanaians that the proposed new levies are to compensate for lost revenue from taxes scrapped to fulfill political promises.

2 Ministers propose new levies
The Minister for Local Government, Chieftaincy, and Sanitation, Ahmed Ibrahim, suggested a dedicated sanitation levy to address escalating waste management challenges.
Meanwhile, the Interior Minister, Alhaji Muntaka Mubarak, announced drafting of an act to introduce a 10-pesewa levy on every litre of petroleum products purchased.
This proposed levy aims to create a dedicated fund for retooling the Ghana National Fire Service (GNFS), providing essential equipment to enhance its operational efficiency.

Economic impact on citizens
However, these proposals have raised concerns about the potential economic impact on ordinary Ghanaians.
The petroleum levy, in particular, would increase fuel costs, leading to higher transportation expenses for goods and services. This could further erode the purchasing power of workers, especially those in the informal sector who depend on affordable transport for their daily activities.
Unlike the Electronic Transactions Levy (E-Levy), which some Ghanaians could evade by avoiding mobile money transactions, no one can escape the financial strain of a fuel levy.

Contradictions in tax policy
Moreover, the timing of these new levy proposals is perplexing, given the government’s recent decision to abolish taxes and levies that had been generating significant revenue.
The public is struggling to understand why a government that scrapped GH₵2 billion worth of taxes to ease financial pressures on citizens would turn around to announce plans to introduce new levies with even greater economic repercussions.
The government introduced two new taxes and levies, extended the duration of two existing taxes which expired at the end of 2024, and scrapped four levies and taxes
The three other levies, taxes the government scrapped in addition to E-Levy are the COVID-19 Levy, 10% withholding tax on betting wins and the 1.5% withholding tax on gold exports.
Meanwhile, the government also introduced a significant increase in the Growth and Sustainability Levy on mining companies, raising it from 1% to 3% of their gross production.
In addition, the government also introduced 2% Growth and Sustainability Levy on specific sectors but did not mention them.
Two other taxes that were set to expire at the end of 2024—the Special Import Levy and the Value Added Tax (VAT) on non-life insurance—were also extended until 2028.

Existing sanitation levy to pay energy debt
A particularly glaring inconsistency lies in the sanitation levy proposal by Ahmed Ibrahim.
Ghana already has a 10-pesewa Sanitation and Pollution Levy on petroleum products, introduced in 2021.
This levy was intended to fund solid and liquid waste treatment and disposal facilities, construct sanitation infrastructure, eliminate open defecation, support fumigation of public places, and maintain landfill sites.
Since its inception, it has accrued over GH₵1 billion, with the 2024 budget projecting an additional GH₵448 million in revenue from it.
However, despite the existing sanitation levy, the current government has diverted its proceeds to pay off energy sector debts instead of using them for their intended purpose.
This misallocation of funds has led to a lack of progress in addressing Ghana’s sanitation problems, which continue to plague major cities such as Accra, Kumasi, and Takoradi.
Against this backdrop, Ibrahim’s call for a new sanitation levy raises serious concerns about transparency and fiscal responsibility.

Misallocation of funds erodes public trust
If the government had not diverted the existing sanitation levy, it would likely not be necessary to propose an additional financial burden on citizens.
The revelation that funds meant for waste management and sanitation improvements have been redirected to other sectors further erodes public trust in the administration’s financial stewardship.

The road ahead
As the debate over these levies continues, it remains to be seen whether the government will reconsider its approach or push ahead with policies that may ultimately contradict its stated goal of easing financial burdens on the populace.
The inconsistency in the administration’s tax policies has left many skeptical about its commitment to prudent economic management, and the coming weeks will be crucial in determining whether citizen concerns are addressed or ignored.
By ELVIS DARKO, Accra