In an interview on TV3’s Hot Issues on Sunday, December 22, 2024, Professor Stephen Adei, a renowned economist and former Rector of the Ghana Institute of Management and Public Administration (GIMPA), shared his thoughts on the current government’s taxation policies, particularly the controversial E-levy.

Speaking to the host, Prof. Adei warned that political leaders must be cautious when making promises about tax reforms.

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“They must carefully consider their promises, such as the taxes they are going to waive,” he emphasized.

He then went on to express his concerns about the potential impact of removing the e-levy altogether, saying, “I would not have even promised to remove e-levy because one of the very difficult things to do in a country like ours is getting people to comply with tax payments.”

The economist stressed the challenge of tax compliance in Ghana, explaining that while citizens might be hesitant to embrace certain taxes, the process of collecting these taxes often involves considerable effort.

“In tax administration, if it costs more to collect money than what you are going to get, you better forget it,” Prof. Adei remarked.

He suggested that policymakers should focus on reducing taxes that are difficult to collect, rather than scrapping them altogether.

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“In the case of the E-levy,” he continued, “I would rather want to reduce some other taxes and keep e-levy. Because you must reduce taxes which are difficult to collect and keep ones which are easier.”

This statement reflects his belief that while the e-levy has faced public opposition, it could be a more efficient tool for revenue generation compared to other taxes that are harder to enforce.

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