Economist Dr. Adu Owusu Sarkodie has cautioned that the government’s decision to abolish the Covid-19 levy could eliminate one of its most significant revenue streams, creating a risky reliance on tax compliance in 2026.

Speaking on Joy News’ PM Express Business Edition, Dr. Sarkodie noted that the administration is removing three major taxes simultaneously, each of which has historically contributed substantially to national revenue.

“In 2026, the government is putting its hope on compliance,” he said, highlighting that the E-Levy, previously generating over ¢2 billion, has already been scrapped. He added that the betting tax, which brought in roughly ¢300 million, has also been eliminated. The Covid-19 levy, expected to generate about ¢3 billion next year, is now likewise abolished.

Dr. Sarkodie emphasised that the Covid-19 levy alone had become as important to government revenue as Ghana’s oil and gas royalties. “Covid-19 was giving us almost the same amount as total royalties from oil and gas. This year, total royalties are estimated at ¢2.9 billion, while the Covid-19 levy would have contributed ¢2.8 billion,” he said.

He warned that removing all three levies would significantly reduce government revenue. “You’ve taken the E-Levy, ¢2 billion; we are going to take away the Covid-19 levy, another close to ¢3 billion—that’s about ¢5 billion. This will bring down your revenue considerably,” he noted.

However, Dr. Sarkodie explained that the government is confident it can offset the revenue loss through improved tax compliance. “The government believes you can raise revenue even by abolishing taxes or reducing rates. If more people are paying, it’s better than a few paying higher rates,” he said.

He added that the administration aims to broaden the tax base, bringing more Ghanaians into the system and fostering compliance as a key strategy for revenue mobilisation. “This government believes that lowering taxes encourages more people to enter the tax bracket, which is central to their compliance-focused approach,” he concluded.