The National Democratic Congress (NDC) government, which rode to power on the promise of abolishing the much-criticized Electronic Transfer Levy (E-Levy), now faces accusations of a profound political deception.
While the E-Levy has indeed been scrapped, its replacement – a new GH¢1 increase on every litre of petroleum products – is poised to inflict a far more widespread and severe financial strain on ordinary Ghanaians.
Critics argue that the government has merely swapped one burden for a heavier, more inescapable one, exposing a troubling inconsistency in its approach to taxation.
The E-Levy: A convenient scapegoat?
During its time in opposition, the NDC was relentless in its condemnation of the E-Levy, branding it a “draconian,” “burdensome,” and “regressive” tax.
They argued it disproportionately affected low-income earners, stifled digital transactions, and was an unnecessary imposition given alleged corruption and wasteful spending by the previous administration.
The promise to repeal the E-Levy became a rallying cry, a symbol of the NDC’s commitment to easing the financial plight of citizens.
True to their word, the E-Levy, which generated GH¢612.34 million in 2022, GH¢1.19 billion in 2023, and GH¢2 billion in 2024, was officially abolished on April 2, 2025. This move was widely hailed as a victory for the people.
However, the relief was short-lived.
Hot on the heels of the E-Levy’s repeal, the NDC government introduced the Energy Sector Levy (Amendment) Bill, 2025, imposing an additional GH¢1 on every litre of fuel.
The government justifies this new levy as essential to tackle Ghana’s crippling energy sector debt, estimated at US$3.1 billion, and to ensure stable power supply.
But a closer look at the figures and the nature of the tax reveals a stark reality:
- Unavoidable Impact: The E-Levy, while pervasive, allowed individuals some room to adjust their behavior (e.g., using cash for smaller transactions) to mitigate its direct impact. The new fuel levy offers no such escape. Fuel is a universal commodity, a fundamental input for virtually every economic activity.
- An increase in its cost, even if initially “absorbed” by currency gains as the government claims, will inevitably lead to:
• Soaring Transportation Costs: Directly affecting commuters, commercial drivers, and the movement of all goods.
• Higher Food Prices: As transportation is a major component of food production and distribution costs.
• Inflated Cost of Goods and Services: Almost every sector relies on energy, meaning the cost will cascade down, impacting every Ghanaian consumer indirectly. - Staggering Financial Extraction:
The financial magnitude of this new levy far surpasses that of the E-Levy. While the E-Levy at its peak generated approximately GH¢2 billion annually, the new GH¢1 increase in the energy sector levy is projected to raise an additional GH¢5.7 billion annually.
This figure is nearly three times the annual revenue of the E-Levy, representing a significantly larger financial extraction from the Ghanaian economy.
When combined with existing energy levies (which collected GH¢6.703 billion in 2022), the total burden becomes immense.
A betrayal of trust
The swift pivot from vociferous opposition to the E-Levy to the imposition of a more impactful fuel levy raises uncomfortable questions about political honesty and consistency. Was the NDC’s opposition to the E-Levy a genuine concern for public welfare, or a calculated political strategy to gain power?
This maneuver risks eroding public trust, as citizens may perceive it as a classic case of “do as I say, not as I do.”
The narrative of “easing the burden” rings hollow when a substantially greater financial strain is subtly introduced through the very lifeline of the economy – fuel.
Call for accountability
Ghanaians must demand clear answers and unwavering accountability. The government must demonstrate with utmost transparency how this substantial new revenue will be utilized to genuinely solve the energy crisis, rather than becoming another source of contention and misapplication of funds.
The time for genuine, sustainable solutions that do not rely on constantly shifting the tax burden onto the ordinary citizen is long overdue. The people deserve more than a mere exchange of one heavy tax for another.
