The Chief Executive Officer of Dalex Finance, Joe Jackson, has expressed doubts about the financial sustainability of President-elect John Dramani Mahama’s proposed tax cuts.
Speaking on TV3, Mr. Jackson highlighted significant fiscal challenges that could arise from the removal of critical tax streams, such as the e-levy, COVID-19 levy, 10% betting tax, emissions levy, and import duties on industrial and agricultural equipment.
“Let us not be mistaken; in 2025, we will have to look at how we are performing in terms of revenue because some of these items are going to go out,” Mr. Jackson said. He emphasized the difficulty of reconciling reduced tax inflows with the country’s need for development funding, asking, “Where is the money going to come from?”
The tax cuts form part of the Mahama administration’s campaign promises, aimed at easing the financial burden on individuals and businesses. However, Jackson’s concerns reflect broader skepticism within the financial sector about how the incoming government plans to maintain fiscal stability while implementing these measures.
As Ghana prepares for its pivotal 2024 general elections, the business community is closely monitoring the economic policies proposed by the leading political parties. The electoral outcomes could reshape the country’s fiscal landscape, influencing both domestic and international investment.
Key among the discussions is the opposition National Democratic Congress (NDC)’s pledge to abolish several taxes, including the controversial e-levy, COVID-19 levy, betting tax, and emissions levy. These promises, championed by President-elect John Dramani Mahama, aim to alleviate the tax burden on businesses and citizens.
However, financial experts like Joe Jackson, have raised concerns about the feasibility of these cuts amid revenue challenges.
Jackson highlighted the potential fiscal gap that could arise from scrapping critical revenue streams without clear alternatives. “You say you are going to remove tax A, B, C, D. But where is the money going to come from?” he questioned during a recent interview.
For businesses, this creates uncertainty about the government’s ability to fund infrastructure and public services, which are vital for economic growth.
While businesses welcome lower tax burdens, there are fears of potential instability in government revenue and its implications for inflation, exchange rates, and public debt.
