John Dramani Mahama, the leader of the National Democratic Congress (NDC) and a former president of Ghana, recently voiced his strong concerns about the ongoing COVID-19 tax in the country. Speaking at a town hall meeting on Monday, August 12, 2024, Mahama criticized the current government, led by President Akufo-Addo, for maintaining a tax that was introduced during the pandemic but remains in place even though the pandemic has passed.
Mahama pointed out that many Ghanaians are still being burdened with this tax, despite the fact that the pandemic, which initially justified its introduction, is no longer a threat. “Ghana is the only country I know that is still being taxed for a pandemic that has passed,” he stated, clearly frustrated by the situation.
The COVID-19 tax, which is essentially a value-added tax (VAT), was originally implemented by the government to help manage the economic challenges brought about by the pandemic. However, Mahama argues that continuing to collect this tax is unfair to Ghanaians who have already endured and survived the difficult times brought on by COVID-19.
According to Mahama, the government has integrated the COVID-19 tax into its revenue commitments to the International Monetary Fund (IMF). This means that the government sees the tax as a crucial part of its plan to meet revenue targets agreed upon with the IMF. “It’s part of the IMF agreement. As part of their agreement with the IMF to increase revenue, they’ve locked COVID inside,” Mahama explained.
He further elaborated that removing this tax would potentially violate the government’s agreement with the IMF, making it a tricky issue for any political party that might want to abolish it. However, Mahama made it clear that if he were to lead the country again, he would take steps to rationalize these taxes and seek out other methods of tax collection. His goal would be to expand the tax base while eliminating what he described as “obnoxious” taxes that unfairly burden the public.
Mahama also took the opportunity to criticize another tax, the E-Levy, which was introduced by the government with the promise of solving many of the country’s financial problems. However, according to Mahama, the E-Levy has not performed as expected and has failed to bring in the revenue that the government had anticipated. “One of the taxes that is not performing is the E-Levy. They said the E-Levy would solve every problem in this country. Unfortunately, it’s not performing well,” he noted.
The COVID-19 Health Recovery Levy, as it is officially known, was introduced in 2021 as a standalone tariff. It is applied to the gross value of taxable goods and services under the Standard Rate and VAT Flat Rate Schemes. The purpose of this levy was to support expenditures related to COVID-19 and other related matters. However, with the pandemic now under control, many Ghanaians, including Mahama, are questioning the need to continue this tax.
Mahama’s comments have sparked a broader conversation about the fairness and effectiveness of Ghana’s current tax system. As the country looks toward the future, Mahama and others are advocating for a tax system that is more just and better aligned with the current economic realities of Ghanaians.
In his remarks, Mahama emphasized that his next government, should he be elected, would focus on finding alternative ways to generate revenue without placing undue stress on ordinary citizens. He suggested that expanding the tax net to include more people and businesses, rather than relying on a few burdensome taxes, would be a more sustainable and equitable approach.
Source: Ghana Web
