Ghana’s 2025 Budget to Scrap E-Levy and COVID-19 Tax Amid Economic Concerns

The Government of Ghana has announced that the 2025 National Budget will include the removal of the Electronic Transfer Levy (E-Levy) and the COVID-19 Health Recovery Levy. This decision aligns with the administration’s commitment to alleviating the tax burden on citizens and businesses. However, economic analysts warn of potential revenue shortfalls that could impact Ghana’s fiscal sustainability.

The planned elimination of these levies is expected to result in substantial revenue losses for the government. Analysts estimate that scrapping both taxes could lead to a cumulative revenue shortfall of approximately GHS 22.15 billion between 2025 and 2027. The E-Levy, which was projected to generate GHS 2.4 billion in 2025, up from GHS 2.1 billion in 2024, will no longer contribute to government revenue. Additionally, the COVID-19 Levy, which was expected to contribute GHS 3.97 billion in 2025, will also be discontinued.

The anticipated revenue losses pose significant challenges to Ghana’s fiscal stability, particularly under the ongoing International Monetary Fund (IMF)-supported program. The shortfall may impact funding for critical sectors such as healthcare, education, and infrastructure. To bridge the gap, the government may need to explore alternative funding mechanisms, including borrowing or introducing new tax policies.

To offset the revenue losses, economic experts suggest reviewing Ghana’s tax policies, particularly in areas such as import exemptions and zero-rated items at the ports. Reducing import exemptions alone could generate approximately GHS 9 billion in revenue, which could help cushion the financial impact of removing the E-Levy and COVID-19 Tax.

Minister of State for Government Communications, Hon. Felix Kwakye Ofosu, has confirmed that the removal of these levies forms part of the government’s 120-day Social Contract, which outlines 26 key pledges aimed at revitalizing the economy and easing the financial burden on citizens.

Among the commitments are the removal of the E-Levy, the COVID levy, a 10% tax on bet winnings, and the emissions levy, all within the administration’s first 90 days in office.

Addressing journalists in Accra on Friday, March 7, Hon. Felix Ofosu Kwakye also revealed plans to review taxes and levies on vehicles and equipment imported for industrial and agricultural purposes.

He further highlighted the government’s intention to launch the 24-Hour Economy Policy and implement a ‘No-Academic-Fee’ policy for all first-year students in public tertiary institutions. Additionally, the first budget will introduce the establishment of a Women’s Development Bank and key job creation programs.

“The finance minister has clearly indicated that we are on course to meeting those promises. So when on Tuesday he unveils the details of his budget, you will find that we have kept faith with the people of Ghana regarding the specific promises we made in the 120-day social contract,” Hon. Ofosu Kwakye stated.

He also addressed concerns about Ghana’s currency depreciation, stating:

“In terms of the currency, the finance minister will highlight measures both within the long term and medium term to address the financial weaknesses within our economy, one of which is rapid currency depreciation.

“In concert with development partners and other economic stakeholders, appropriate measures will be prescribed for addressing this perennial challenge of currency depreciation.” The 2025 budget is expected to outline comprehensive policies aimed at economic stabilization and growth while delivering on key campaign promises. While removing the E-Levy and COVID-19 Tax is expected to provide relief to individuals and businesses, the government must ensure that alternative revenue sources are identified to maintain fiscal stability.

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