Dr. Domfe criticises gov’t for ‘hiding’ energy sector levy hike

Senior Research Fellow and Development Economist, Dr. George Domfe, has raised concerns over the government’s fiscal policy after the Energy Sector Levy (ESLA) was increased significantly, arguing that the move places a heavy financial burden on Ghanaians while receiving little public attention.

The levy has reportedly risen from 24 pesewas to GHS1.93 per litre, representing an increase of more than 700 percent.

The sharp adjustment has sparked debate among economists and policy analysts about the government’s approach to taxation and fiscal transparency.

In a post shared on his Facebook page, Dr. Domfe questioned the Finance Minister’s handling of the levy increase, noting that despite its potential impact on households and businesses, the measure was barely highlighted during the presentation of the 2026 Mid-Year Budget Review.

According to him, taxes remain an important source of government revenue and play a key role in financing national development when they are designed fairly and implemented transparently.

However, he argued that such a substantial increase in a levy tied to fuel prices inevitably affects the cost of living.

Dr. Domfe explained that higher fuel costs often translate into increased transport fares, rising food prices, and higher operating expenses for businesses, placing additional pressure on consumers already dealing with economic challenges.

He also questioned the government’s communication strategy, suggesting that the limited attention given to the levy increase during the budget presentation raises concerns about openness in fiscal policy.

The economist further argued that the government’s public messaging on taxation appears inconsistent. While government officials have repeatedly cited the abolition of the Electronic Transfer Levy (E-Levy) as evidence of a commitment to reducing the tax burden on citizens, he believes the sharp increase in the Energy Sector Levy sends a different signal.

“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.

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