E-Levy: Response from town hall meeting not enough to pass bill – Financial Analyst

A senior lecturer at the University of Ghana Business School, Professor Lord Mensah, says feedback from the town hall meeting is insufficient for one to say the Ghanaian populace support the introduction of the e-levy, hence, calling for its passage.

He argued the town hall meeting refused to address some critical concerns of the people. “If you ask me, I will say the response from the town hall meeting on the e-levy is not enough to say the bill will be passed. Even if the response is positive, the rate to be charged was not discussed. The people were not engaged on the rate and I think that’s a problem.”

Explaining how taxes work, he pointed out the sensitivity of taxes and their rates. According to him, the rate of a tax would either see the government not meeting its revenue target or discouraging the people from the business the tax has been placed on. With this in mind, he believes every government must find an optimum level to peg taxes, especially the e-levy which may become a lifelong one.

In an interview with Don Kwabena Prah on Happy98.9FM’s EpaHoa Daben political talk show, Professor Mensah stated, “the rate of the levy has to be something that will not discourage businesses. We’ve already invested into the digitization of the economy and I feel it is a worthy investment and the benefit will be enormous if it is done well.”

Professor Lord Mensah insists the rate for the e-levy should have been way less as its introduction was rushed. “You have to consider this thinking about the long-term benefit as opposed to doing it now for a short-term benefit.”

He advised the e-levy would be easy to introduce in the next 10 to 25 years when the generation then would be technologically savvy and will have no option but to pay the tax when introduced.

To him, the current generation of Ghanaians are used to sending money via others and would resort to that if the e-levy is introduced.

The Financial Analyst posited Ghanaians are losing trust in the government with regard to the management of the public purse and urged them to create a Special Purpose Vehicle (SPV) for the e-levy. “If the e-levy was pegged at 0.5percent for the start and invested that revenue into developmental projects visible for all to see, it would be easy to collect the levy.”

The government held a town hall meeting to sensitize Ghanaians on the proposed 1.75% electronic transaction levy, which is awaiting approval or otherwise by Parliament.

The e-levy when passed will tax all electronic transactions including Mobile Money and bank transfers among other things.