A tax expert, Isaac Danso Agyiri, has urged the government to consider reintroducing some recently scrapped taxes to address a growing revenue gap and support fiscal stability.
He noted that while the abolition of the E-Levy, COVID-19 Levy and Betting Tax has brought relief to households and businesses, it has also significantly reduced government revenue at a time when public expenditure pressures remain high.
According to Mr Agyiri, the challenge now facing policymakers is how to balance the need for economic relief with the equally important need for sustainable domestic revenue mobilisation.
“The scale of the revenue gap created by the removal of these taxes makes it necessary to revisit them. However, any reintroduction must be done in a more refined and efficient manner,” he said.
He emphasised that the previous design of some of the taxes contributed to public resistance, particularly concerns about fairness, transparency and the burden on low-income earners.
Mr Agyiri explained that reintroducing the taxes in their old form would likely face the same challenges, stressing the need for a redesigned approach that addresses these concerns.
“The focus should be on redesigning these taxes to ensure they are fair, simple and better understood by the public. Without that, compliance will remain a challenge,” he stated.
He pointed to the country’s rapidly expanding digital economy as an opportunity for government to develop a more effective and acceptable tax framework. With increasing volumes of mobile money and electronic transactions, he said the digital space offers a viable avenue for revenue mobilisation.
According to him, a restructured digital tax could be designed to protect low-value transactions while ensuring that higher-value activities contribute appropriately to the tax base.
Mr Agyiri also stressed the importance of public engagement and awareness in the success of any tax policy. He observed that limited communication around the purpose and use of some of the scrapped taxes contributed to widespread opposition.
“Public trust is critical. The government must clearly communicate the purpose of any tax and demonstrate how the revenue is used. That is key to improving acceptance,” he noted.
He further called for the use of technology to improve tax administration, reduce leakages and enhance transparency within the system.
While acknowledging the immediate benefits of tax relief, Mr Agyiri cautioned that failure to address the resulting revenue shortfall could have broader implications for the economy.
“If the gap is not closed, the government may have to increase borrowing or cut spending, both of which come with economic costs,” he warned.
He concluded that a balanced approach combining targeted relief with efficient revenue measures will be essential to maintaining fiscal stability and supporting long-term development.
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