IMANI report reveals a vast reduction in electronic transfers
Government considering IMF?
Gabby Otchere-Darko’s disclosure that the Electronic Transactions Levy (E-Levy) which was implemented in May with the hope of turning the Ghanaian economy around, has generated less than GH¢60 million instead of GH¢600 million, has triggered many reactions with Nana Aba Anamoah resorting to a popular phrase.
The leading member of the ruling New Patriotic Party (NPP) on Monday; June 27, 2022, expressed concern about the government’s inability to garner the estimated revenue.
“After 5 months of stalemate and bashing, the e-levy, after implementation, is delivering only 10% of estimated revenues; our revenues remain very low as compared to the rest of the world; debt levels dangerously high, cedi, like most currencies, struggling against the US dollar…”
“What options are open to government? The question should rather be: what option, if adopted, will re-inject investor confidence in our economy? Even if we find the $3-5 billion required, will that help? E-levy which was to have given us some 600m by now has done less than 60m,” Gabby’s tweets read.
Reacting to the tweet, Nana Aba Anamoah, a broadcaster and General Manager of GhOne TV said: “The chickens have come home to roost.”
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The popular phrase means that the bad things someone has done in the past have come back to bite or haunt the individual.
The E-Levy, 1.5% value tax on all electronic transactions above 100 Ghana cedi, was implemented by the Ghana Revenue Authority (GRA) on May 1. This was despite the numerous concerns a section of the public raised, including double taxation.
The government, however, argued that the policy was to enhance revenue mobilization, support entrepreneurship, increase Ghana’s tax-to-GDP ratio and provide an opportunity for everyone to contribute to national development.
After the policy was implemented, a number of people withdrew their monies while others ceased transactions.
A report by IMANI Centre for Policy and Education in collaboration with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) on June 24, 2022, said: “About 83% or 8 in ten respondents indicated that their volume of transactions has changed since the implementation of the e-levy in May 2022. Of this number, about 47% indicated that they had reduced the number of mobile money transactions by about 51% to 100%. Our findings suggest that the official 24% attrition rate, which the government estimates for the first three to six months following the introduction of the e-levy, is likely to be much higher.”
“This finding implies that the forecasted GH¢4.5 billion (GHS¢60 million per month) e-levy revenue target for 2022 is unlikely to be attained given the strong consumer backlash and people finding alternative means of undertaking financial transactions.”
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