Government want to attain investor confidence, Dr.Peprah
E-Levy to help government projects, like GETfund, CFO
Chief Finance Officer of Valley View University, Dr. Williams Peprah, has revealed that government’s insistence on passing the electronic transaction levy is to help in collateralizing the expected GH¢7 billion Electronic Transaction Levy (E-Levy) in order to borrow in advance from international institutions, to finance some of its projects.
According to him, the E-Levy if passed, will afford government the opportunity to obtain loans.
“It is not only about the ¢7.0 billion tax revenue from the E-Levy within a year, but it gives government the leverage to be able to go out and get other investors to give them more money and then they [government] will use the E-Levy revenue as a repayment plan. In fact, if every investor who knows very well about this revenue from E-Levy, it is very easy to raise funds”
“That is why government is eager to make sure that the E-Levy is passed and then they [government] will get the ¢7.0 billion and also additional loans can be raised on the back of the e-levy”, Dr. Peprah stressed.
“Normally, in finance, this is what we call securitisation and so this is what the government is trying to do. So that is why we see the E-Levy is more important to the government”, he concluded.
Speaking in an interview with Joy Business the CFO said the E-levy is not going to resolve the fiscal challenges facing the country.
According to him, investors want to see how well government is able to generate revenue thus government’s determination in getting parliamentary approval for the E-Levy.
“What government intends to do is to leverage the E-Levy revenue to go and borrow in advance and use it as collateral – repayment strategy – to investors. As you are aware, government cannot go directly to the capital market, but government can go to other institutions that can give concessionary loans and then government can use the E-levy to service the loan.”
“We know that this has been done in the past. Our road toll levy was used in such instance. Currently, the GETFund…a certain portion has also been used to get inflows into the country for development projects, and government is using the GETfund revenue to service those loans”, he added.
Chief Finance Officer of Valley View University, Dr. Williams Peprah