An Economist, Daniel Amarteye Anim, says the introduction of the Electronic Transaction Levy also known as E-levy geared at increasing revenue generation is a deviation of the practice in the Africa sub-region.
Speaking to Naa Dedei Tettey on Starr Today on Tuesday, the Economist reiterated that the E-levy cannot be in consonance with the practice in Africa adding that when introduced Ghanaians must demand that the revenue generated are used for their benefit within the medium term and long term perspective.
According to him, Ghanaians have rejected a similar levy – Financial Service Levy- before so the government would have to look elsewhere if it wants to maximize revenue.
“Initially, when the Minister made the announcement when he was reading the budget, I was with the view that this is an economy that we wanted. We wanted to go cashless and drive digitization and financial inclusiveness, so introducing the E-levy at this time may not be too good and not appropriate.
“More importantly, because we have case study within the Sub-region to suggest and what some of us have read in about Kenya, Uganda and the rest and even back home we have a similar situation. If you can recall when the Financial Services levy was introduced, we realized that it will not help financial inclusiveness in terms of people patronizing the products and services of the Commercial Bank. Quickly, it was withdrawn,” Mr. Anim revealed.
The Minister for Finance, Ken Ofori-Atta on November 17, 2021, presented the 2022 budget to Parliament. The budget, on the theme: “Building a sustainable entrepreneurial nation: fiscal consolidation and job creation”, emphasizes a post-COVID-19 economic recovery agenda, centered on youth entrepreneurship.
Mr. Ofori Atta stated “Mr. Speaker, our roads need fixing. Our roads are being fixed. It is true that more roads have been fixed and are being fixed over the last five years than any relative period in the entire history of our nation. We even want to do a lot more.”
The Minister said to compensate for the abolished road tolls, the government is looking to introduce innovative ways of raising revenue such as the proposed 1.7% phone transactions levy payable by mobile money users per transaction above GHS 100.
“Total value of transactions for 2020 was estimated to be over GHS 500 billion Cedis compared to GH¢78 billion Cedis in 2016 just 5 years ago, while total mobile money subscribers and active mobile money users have grown by an average rate of 18% and 16% respectively between 2016 and 2019. Mr. Speaker, it is becoming clear there exists an enormous potential to increase tax revenues by bringing into the tax bracket, transactions that could be best defined as being undertaken in the “shadow economy”.
“After considerable deliberations, the Government has decided to place a levy on all electronic transactions to widen the tax net and rope in the informal sector. This shall be known as the “Electronic Transaction Levy or E-Levy.”