Questions are mounting over the government’s fiscal strategy following concerns raised by Senior Research Fellow and Development Economist, Dr George Domfe, over a sharp increase in the Energy Sector Levy (ESLA).

The levy has increased from 24 pesewas to GH¢1.93 per litre, representing an increase of more than 700%.

In a post shared on his Facebook page, Dr Domfe raised concerns about the policy shift by the Finance Minister, drawing attention to what he described as the levy adjustment’s muted presentation during the recent mid-year budget review.

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While acknowledging that taxation remains a vital tool for state revenue mobilisation and economic development, particularly when structured progressively, Dr Domfe argued that the magnitude of the levy increase would have a significant direct impact on consumers.

Fuel price increases typically affect transport fares, food distribution costs and the general cost of living. However, despite the potential economic implications of increasing the levy to GH¢1.93 per litre, the adjustment received limited mention during the official budget presentation, raising concerns about transparency in fiscal communication.

At the centre of Dr Domfe’s criticism is what he describes as a contradiction in the government’s public messaging. He noted that while government communicators and policymakers have highlighted the abolition of the Electronic Transfer Levy (E-Levy) as evidence of a pro-taxpayer and “anti-tax” agenda, the introduction of higher levies on essential commodities appears inconsistent with that position.

“There is nothing inherently wrong with taxes, especially when they are progressive and well justified. However, constantly pointing to the abolition of the E-Levy as proof of being ‘anti-tax’ while imposing significantly higher levies elsewhere represents the height of disingenuousness,” Dr Domfe stated.

Dr Domfe’s comments add to a growing debate among economists and policy analysts calling for greater transparency and consistency in tax policy.

As households and businesses continue to grapple with rising costs, analysts argue that fiscal relief in one area should not be offset by substantial tax increases elsewhere, and are calling for a more open discussion on how government raises and manages revenue.

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