Prof. Bokpin backs E-Levy repeal; calls for prudent economic policies
Economist and Professor of Finance at the University of Ghana, Godfred A. Bokpin, has welcomed the repeal of the Electronic Transfer Levy (E-Levy), describing it as a necessary step to boost Ghana’s digital economy and financial inclusion.
Parliament passed a bill on Wednesday, March 26, to abolish the controversial levy, which had been in place since 2022. The legislation now awaits presidential assent from John Mahama.
The E-Levy, introduced by the previous New Patriotic Party (NPP) administration, imposed a 1.5 per cent tax on electronic transactions, including mobile money transfers, bank transfers, and online payments. The policy was widely criticised for discouraging digital transactions and increasing the financial burden on citizens.
Speaking on TV3’s Big Issues on Thursday, March 27, Prof. Bokpin highlighted economic indicators and public sentiment that had long signalled the policy’s ineffectiveness. He criticised the government’s initial insistence on the levy despite opposition from economists, financial analysts, and mobile money agents, who had warned that the tax would stifle economic activity.
"The science was clear, the data was clear. Ordinary Ghanaians and the mobile money agent network had done their own analysis and spoke more forcefully than we economists did," he said.
Prof. Bokpin argued that instead of imposing taxes that burden citizens, the government should focus on cutting wasteful expenditure.
He cited Côte d'Ivoire as an example of a country that successfully managed economic challenges through prudent spending.
He also pointed to Ghana's 2025 budget, which shows signs of fiscal consolidation, with projected government borrowing and expenditure set to decrease compared to 2024.
“The 2025 gross financing need has dropped to GHS 44 billion from GHS 61 billion in 2024. This is a sign of fiscal consolidation, shifting towards expenditure reduction rather than excessive borrowing,” he explained.
The economist further stressed that Ghana’s economic future lies in the digital sector, arguing that taxes like the E-Levy hinder its growth.
“The future of money, currency, and business is digital. Instead of imposing taxes that hinder growth, we should be creating an enabling environment where businesses thrive and the government benefits from corporate tax revenues,” he stated.
On concerns over a projected GHS 2 billion revenue loss following the E-Levy’s repeal, Prof. Bokpin downplayed fears, arguing that the money would remain in the pockets of Ghanaians, driving consumption and stimulating economic activity.
“This is not the first time we are seeing such a policy shift. In 2017, when the government abolished certain taxes and reduced utility prices, over GHS 2 billion remained in the pockets of households and businesses. That money went into consumption and production, which drive economic growth,” he noted.
He urged the government to adopt policies that encourage digital transactions and enhance financial inclusion, stressing that a thriving digital economy would generate more sustainable revenue than regressive taxation policies like the E-Levy.