Government’s insistence to move ahead with E-Levy disturbing – Financial analyst

E-Levy rate reduced from 1.75% to 1.5%

Parliament at an impasse over E-Levy

Ghanaians oppose E-Levy

Government’s insistence to move ahead with the passage of the Electronic Transaction Levy (E-Levy) has been described as disturbing.

This is according to Financial Analyst, Kenneth Thompson, who believes the tax measure, if approved will be detrimental to livelihoods, businesses, and jobs.

Making his submission on Citi TV’s 'Point of View' on February 2, 2022, the financial analyst said Ghana’s revenue mobilisation efforts still have some lapses which have affected the tax regime.

“The E-levy is not the game-changer. there may be a justification for taxing electronic transfers, but it doesn’t solve the issue of widening the tax net. Potentially, if we are not careful, and we push it through the way that it’s been presented, it will kill a lot of businesses and all electronic transactions. We do not have the incentive to encourage the people to make these things work. There is absolutely zero incentive for people to do the right thing,” Thompson is quoted by Citi News.

“I think the E-levy is being oversold. We are being told that if we don’t do E-levy, we will go into a tailspin and that if we do E-levy we will end up with a street paved with gold. If you take for instance those who accept money through their Mobile money wallet, it is going to kill that because they are going to pay tax on it. That is the reality, Even when the sender pays, it kills the business. So that business is dead. When we did the analysis, we realized that the amount of taxes is going to be bigger than investments,” he added.

Meanwhile, the financial analyst, therefore, called on government to as a matter of urgency conduct proper introspection into its current revenue mobilisation strategies.

The announcement of the E-Levy has courted widespread condemnation and backlash from lawmakers and the public. The Minority caucus of parliament, however, believes the levy will be detrimental to jobs, businesses, and erode gains made towards financial/digital inclusion.

But the government insists the E-Levy Bill is necessary to fill revenue gaps of government's 2022 budget, create jobs and increase infrastructure.

The E-Levy was announced by the Finance Minister, Ken Ofori-Atta, in November last year while he delivered the 2022 budget statement before Parliament.

The levy, when approved, seeks to impose a 1.75 percent charge on all electronic transactions covering mobile money payments, bank transfers, inward remittances among others.