Auditing and accounting firm, PricewaterhouseCoopers Ghana has called on the government to review the rate applied on the Electronic Transfer Levy for transactions.
According to the firm, a rate of not more than 0.75 percent is apt, adding that the implementation of the tax measure must also be reviewed.
PwC Ghana in its commentary on the 2022 mid-year budget review explained the call is due to the government’s revision of the revenue target for the E-Levy by 91 percen1 from GH¢6.9 billion to GH¢0.6 billion.
“The downward revision of the e-levy revenue target by over 91% (from GH¢6.9 billion to GH¢0.6 billion) indicates the need for a review of the policy and its implementation. We wish to remind the government of our call for the e-levy rate to not exceed the rates typically charged by resident platform operators of not more than 0.75%.”
“While the benefit of increased global oil prices has helped to support the budget in the short term, the fundamental and perennial challenge around revenue mobilisation, and the need to significantly improve the country’s tax to Gross Domestic Product (GDP) ratio persists and still needs to be confronted.”
“This, in our [PwC] view, continues to be the driver for the additional revenue measures, which government has indicated it will pursue in the second half of 2022,” the auditing firm explained.
Touching on the government’s revenue and grants target, PwC noted that the revised target GH¢100.5 billion to GH¢96.8 billion for 2022 represents a 3.7 percent reduction.
This, according to the firm translates into a growth target of 37 percent relative to the earlier 2021 performance of GH¢70.9 billion.
“The revised target is expected to be achieved mainly as a result of the windfall in revenue from oil production and exports, a result of increased global oil prices. We believe it will help significantly offset shortfalls from other revenue sources, particularly tax revenues.”
Meanwhile, Finance Minister, Ken Ofori-Atta has disclosed that the proceeds from the E-Levy are woefully below projected numbers.
He said the levy is currently bringing in about 10 percent of the projected GH¢600 million monthly. He put the shortage down to leakages and exemptions.
“We expected to raise some GH¢600 million a month or so and we are barely 10% of that given the leakages and the exemptions that we have given.
“So, that will be investigated and we should be able to plug those holes and that will be helpful,” he stressed in an interview on Joy News’ PM Express programme on July 28.
MA/BB
Vish Ashiagbor, Senior Country Partner of PwC Ghana