KPMG Survey: Government Set to Lose GH¢6.4bn if E-levy and Covid-19 Measures are Scrapped

A recent pre-budget survey by KPMG has highlighted a significant potential revenue loss for the Ghanaian government if the Covid-19 and E-levy taxes are removed in the upcoming 2025 budget. According to the findings of the 2025 Pre-Budget Survey submitted to the Ministry of Finance, the government stands to lose an estimated GH¢6.4 billion in revenue should these levies be scrapped.

The survey underscores the substantial fiscal gap that would emerge if these taxes, which were introduced to help the country navigate economic challenges, are abolished. The removal of these taxes could further exacerbate the government’s ongoing fiscal struggles, leading to a considerable shortfall in revenue. However, KPMG’s survey also suggests a range of measures to address this potential deficit and support the government in sustaining its revenue flow.

Among the key recommendations presented in the survey is the use of technology as a tool to bridge the expected revenue gap. KPMG advocates for technological innovation in several areas, particularly in property rate administration and collection. By digitizing and automating tax systems, the government could improve tax compliance, enhance revenue generation, and reduce the risk of leakages. The firm also proposes a reevaluation of taxation policies in the digital and e-commerce sectors, which have become increasingly important in the modern economy. These sectors present a significant opportunity for the government to generate additional tax revenue while adapting to the digital transformation taking place worldwide.

Additionally, KPMG emphasizes the importance of strengthening public financial management systems. According to the survey, one way to improve fiscal sustainability is by closing loopholes in public procurement processes and addressing inefficiencies in public spending. By ensuring that funds are used effectively and eliminating wasteful expenditures, the government could free up resources for other critical needs.

The survey also suggests that for Ghana to thrive in its 24-hour economy, the country must focus on industries that naturally operate around the clock and are crucial to driving consumer demand. Key sectors such as manufacturing, transport and logistics, healthcare, retail and hospitality, and digital services are seen as areas that can contribute to increased economic activity and competitiveness in global markets. By focusing on these sectors, the government could stimulate growth, create jobs, and enhance the country’s overall economic resilience.

KPMG’s survey highlights that most respondents are hopeful that the policy measures included in the upcoming budget will serve as a foundation for economic recovery. With the right mix of tax reforms, technology-driven initiatives, and enhanced financial management, Ghana could strengthen its fiscal position and begin to address its economic challenges.

There is an understanding among respondents that Ghana’s economy faces significant hurdles, but there is also a shared belief that targeted policy changes could help the country bounce back. The use of technology to streamline tax collection and improve administrative systems is seen as an essential step toward modernizing the country’s financial infrastructure and making it more sustainable in the long term.

The findings also reflect the growing need for the government to prioritize sectors with the potential to sustain 24-hour operations and to increase global competitiveness. Industries such as digital services and transport offer the chance for growth by meeting the increasing demands of both local and international consumers. As these sectors continue to develop, the government could explore ways to create an enabling environment for growth through targeted incentives and policies.

In conclusion, the KPMG pre-budget survey serves as a crucial reminder of the fiscal challenges facing Ghana in 2025. It underscores the importance of exploring new avenues for revenue generation, particularly through the use of technology, and the need to focus on sectors that have the potential to drive growth and global competitiveness. As the government prepares for the upcoming budget, it must consider the potential consequences of removing key revenue sources such as the E-levy and Covid-19 levy while also exploring innovative solutions for sustainable economic recovery.