Government's 'Dumsor Levy' to Yield GHS5.7 Billion Annually from Ghanaians

Strategic Insights -

The Minority Members of Parliament (MPs) from the New Patriotic Party (NPP) have analyzed the government's plan to implement a GHS1 'Dumsor' levy on every liter of petroleum product purchased, which would generate GHS5.7 billion annually from all Ghanaians. This contrasts sharply with the E-levy introduced by the previous NPP government, which yielded GHS2 billion in revenue annually and was strongly opposed by the National Democratic Congress (NDC) in opposition. The Minority MPs have described the government's action as hypocritical and draconian, with dire consequences for the economy.

Key Takeaways:

  • The proposed GHS1 'Dumsor' levy is charged at a rate of 8% per transaction, making it one of the highest tax rates introduced in Ghana in a single instance.
  • The levy is projected to yield GHS5.7 billion from all Ghanaians, including farmers who buy fuel for their tractors and persons who buy fuel for any other purpose.
  • Unlike the E-levy, which was payable only by people who opted to do money transfers, the 'Dumsor levy' is payable by all Ghanaians, except those who decide to walk every day.
  • The 'Dumsor levy' has a total cascading effect as it will affect the prices of transportation and consequently any item that is transported, like food and clothes among many others.
  • The energy sector debt is estimated at US$3.1 billion as of March 2025, but a minimum of US$3.7 billion is needed to clear the debt, with an additional US$1.2 billion required to procure essential fuel for thermal power generation throughout 2025.
  • The Minority MPs argue that the decision is unrealistic since the energy sector debt far outweighs what the government has projected to make by the end of 2026.
  • The Minority MPs also advised the government to conclude negotiations of the PPAs that pass on fuel and capacity charges to government, to eliminate the need for off-book debts caused by the take or pay clauses in the energy sector contracts signed between 2013 and 2016 under the previous NDC government.

Statistics:

  • The proposed GHS1 'Dumsor' levy is estimated to yield GHS5.7 billion annually from all Ghanaians.
  • The energy sector debt is estimated at US$3.1 billion as of March 2025.
  • A minimum of US$3.7 billion is needed to clear the debt, with an additional US$1.2 billion required to procure essential fuel for thermal power generation throughout 2025.
  • The 'Dumsor levy' is projected to generate GHS9 billion by December 2026.
  • The effective rate of the 'Dumsor levy' is 8% on a transaction, compared to the 1% effective rate of the E-levy.

Sources:

  • An analysis by Minority Members of Parliament (MPs) from the New Patriotic Party (NPP).
  • An interview with Kojo Oppong Nkrumah, Ranking Member on the Economy and Development Committee and MP for Ofoase Ayeribi.
  • A press conference in Accra on June 9, 2025 jointly addressed by Kojo Oppong Nkrumah and George Kwame Aboagye, Ranking Member on the Energy Committee and MP for Asene/Manso/Akroso.
  • Comments made by Minister of Finance, Dr. Cassiel Ato Forson, on March 11, 2025.
  • Comments made by Minister of Finance, Dr. Cassiel Ato Forson, on June 3, 2025.