Drivers of Ghanaians’ approval of the electronic levy

Abstract

The government of Ghana proposed an electronic levy (E-LEVY) in the 2022 budget and economic policy statement to increase revenue in the wake of dwindling opportunities for borrowing from the external market. Whilst existing studies found that most Ghanaians did not support the E-LEVY, the factors that explain the decision were not studied. We contribute to the literature on the E-LEVY by examining the drivers of approval of the E-LEVY in Ghana. We used data of 600 respondents and fitted it to a cloglog model selected based on a battery of tests. We found that older persons were more likely to approve of the E-LEVY than younger people. Persons affliated with the ruling party, the NPP, were more likely to approve of the E-LEVY than persons not affliated with the party. Level of education, gender, size of household, monthly income and marital status did not distinguish the tendency to approve of the E-LEVY. Although the ruling party-afliated respondents were more likely to approve of the E-LEVY, the low probability requires that the government engages not only its party supporters but independents, about the need to support and pay the E-LEVY.