The rate was reduced from 1.75% to 1.5%
Minority caucus staged a walkout
Prof. Peter Quartey, has stated that the passage of E-Levy will put Ghana on a higher pedestal in terms of generating revenue rather than resorting to the International Monetary Fund (IMF) for a bailout.
The Director of the Institute of Statistical, Social and Economic Research (ISSER), explained on Joy FM's Super Morning Show, on Wednesday, that in spite of whatever happened prior to the passage of the Bill by Parliament, E-Levy will provide substantial revenue for the state at a time when the country is going through economic hardships.
Prof. Quartey noted that in this crucial moment where the country is facing some economic difficulties, it is very prudent for the state to raise its own revenue than resort to the IMF which will propose “harsh” measures that will not augur well for the economy.
“You’ll recall that when we suffered the downgrade, one of the reasons was the fears that we’ll not be able to meet the needed revenue, so there’s going to be a revenue gap, but E-Levy comes in to balance.
“Having passed the E-Levy will give some sort of assurance that revenue gap will be plugged in one way or the other, perhaps not fully, but at least there’s some revenue that will be realised from this,” he said.
Prof Quartey observed, “I don’t think it will augur well for us as a developing country. So if we can find ways to raise revenue and create revenue, I think it’s better than when we go for some of these harsh measures.”
In his view, “If you’re going to tax, you ought to be very careful with the rate at which you tax since there are other options and as for me, this is why we recommended that a rate below 1% is something that most consumers will cope with, but as the rate increases, be rest assured that people will find alternatives and you may not be able to realise the revenue earmarked.”
About the E-Levy bill
The government of Ghana will charge a rate of 1.5% on electronic transactions that are more than GH¢100 on a daily basis.
Critics of the proposal have warned that this new levy will negatively impact the Fintech space, as well as hurt low-income people and those outside the formal banking sector.
The levy has been the source of tension in Parliament since it was introduced in the 2022 budget. The tensions culminated in a scuffle between lawmakers in Parliament in December 2021.
The government has, however, argued the levy would widen the tax net and that could raise an extra GH¢6.9 billion in 2022. There are also concerns that the government may securitise proceeds from the E-Levy to raise extra revenue.
Prof. Peter Quartey, ISSER Director