politics
Government Defends Dumsor Levy Amid Economic Concerns
Accra, Ghana – June 6, 2025 – The introduction of the GH¢1 Dumsor Levy has sparked intense debate across Ghana’s political and economic landscape. Officially known as the Energy Sector Levies (Amendment) Bill, 2025, the levy imposes an additional GH¢1 charge per litre of fuel to generate revenue for settling Ghana’s longstanding energy sector debts. While the government argues that the levy is necessary to stabilize electricity supply, critics contend that it unfairly burdens citizens and contradicts previous tax policies.
Government’s Justification for the Levy
The bill was assented to by President John Mahama, who emphasized that the levy is a strategic measure to address Ghana’s energy sector challenges. According to Finance Minister Dr. Cassiel Ato Forson, the funds raised will be used to pay off debts owed to Independent Power Producers (IPPs) and ensure a stable electricity supply.
During parliamentary discussions, Dr. Forson defended the levy, stating that Ghana’s energy sector has suffered from financial mismanagement and inefficiencies, leading to crippling debts. He argued that without immediate intervention, the country could face severe power shortages, reminiscent of the dumsor crisis that plagued Ghana in previous years.
Criticism from Economic Experts and Opposition Figures
Despite the government’s justification, the levy has faced strong opposition, particularly from former Finance Minister Dr. Mohammed Amin Adam. He criticized the policy, arguing that it undermines the economic relief that Ghanaians should be experiencing due to the cedi’s recent appreciation.
Dr. Amin Adam contended that the government had previously abolished several taxes, including the e-levy, betting tax, and emission levy, only to introduce a higher petroleum levy that generates GH¢5.7 billion annually—a figure surpassing the revenue from all abolished taxes combined. He described the levy as “lazy policymaking”, asserting that it shifts the cost of poor governance onto ordinary citizens rather than addressing inefficiencies within the energy sector.
Ato Forson’s Past Remarks Come Under Scrutiny
Interestingly, Finance Minister Dr. Cassiel Ato Forson had previously stated that tariffs should not be used to reward inefficiencies within the Electricity Company of Ghana (ECG). His past remarks have resurfaced, with critics questioning whether the new levy contradicts his earlier stance on taxation and energy sector reforms.
During his vetting by Parliament’s Appointments Committee, Dr. Forson had argued that Ghana’s tax revenue-to-GDP ratio could be increased through better compliance, rather than imposing new taxes. However, the introduction of the Dumsor Levy appears to contradict this position, leading to accusations of policy inconsistency.
Public Reaction and Economic Implications
The levy has sparked public outrage, with many Ghanaians expressing frustration over the rising cost of living. Fuel prices have already been a major concern, and the additional GH¢1 charge per litre is expected to increase transportation costs, affecting businesses and households alike.
Civil society organizations and opposition parties have vowed to challenge the levy, with some calling for mass protests. The Minority in Parliament boycotted the vote on the bill and has pledged to repeal the levy if elected in the upcoming general elections.
Conclusion: A Policy at the Crossroads
The Dumsor Levy represents a critical policy decision for Ghana’s energy sector. While the government insists that it is a necessary intervention, critics argue that it burdens citizens and contradicts previous tax policies. As the debate intensifies, the levy’s long-term impact on Ghana’s economy and energy stability remains to be seen. Ghana’s economy and energy stability remains to be seen.
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