A leading member of the governing New Patriotic Party (NPP), Gabby Otchere Darko, has said Ghanaians want the challenges facing the country to be addressed but are against the government’s decision to raise revenue through levies to undertake the development projects.
“Ghana’s development paradox. You say you want the country fixed. Yet, you are against raising revenue to get it fixed! Motives matter!” the former Executive Director of the Danquah Institute said in a tweet on Monday, November 22.
His comment comes at a time the E-levy policy proposal in the 2022 budget statement presented to Parliament by the Finance Minister has met resistance from Ghanaians including the Minority in Parliament.
For instance, the Member of Parliament for Ningo Prampram, Samuel Nartey George, has said the proposed E-levy is a rip-off.
He described it as a Ponzi scheme intended to tax the same value of money multiple times.
In a tweet, he said “The more I process the e-Levy, the angrier I get. It is a complete rip-off. It is a taxation Ponzi scheme designed to tax d same value of money multiple times. It is plain government thievery & I cannot vote to approve a budget that has that levy included. No!”
Minority Leader Haruna Iddrisu also indicated that the E-levy is a disincentive to the growth of digital economy.
To that end, he said, the Minority will not support it.
Speaking at a post-budget workshop in Ho on Saturday, November 20, he said “Mr. Speaker, understandably, we see that the Minister of Finance seeks to introduce some measures including the now popularly declared e-levy or digital levy as some have quite named it.
“Mr. Speaker, our concern is whether the e-levy itself is not and will not be a disincentive to the growth of the digital economy in our country. We are convinced that the e-levy may as well even be a disincentive to investment and a disincentive to private sector development in our country. We in the minority may not and will not support the government with the introduction of that particular e-levy. We are unable to build a national consensus on that particular matter.”
Finance Minister Ken Ofori-Atta announced a new levy to be charged by the government in 2022 on all electronic transactions to widen the tax net and rope in the informal sector.
“It is becoming clear there exists the enormous potential to increase tax revenues by bringing into the tax bracket, transactions that could be best defined as being undertaken in the ‘informal economy,” Mr. Ofori-Atta observed on Wednesday, November 17 as he presented the 2022 budget statement in Parliament.
“After considerable deliberations, the government has decided to place a levy on all electronic transactions to widen the tax net and rope in the informal sector. This shall be known as the ‘Electronic Transaction Levy or E-Levy’.”
He explained that the new E-levy will be a 1.75 percent charge on all electronic transactions covering mobile money payments, bank transfers, merchant payments, and inward remittances to be borne by the sender except inward remittances, which will be borne by the recipient.
This will, however, not affect transactions that add up to GH¢100 pr less per day.
“A portion of the proceeds from the E-Levy will be used to support entrepreneurship, youth employment, cyber security, digital and road infrastructure among others.”
This new levy is scheduled to start Saturday, January 1, 2022.
In 2020, the total value of transactions was estimated to be over GH¢500 million with mobile money subscribers and users growing by 16 percent in 2019.
According to a Bank of Ghana report, Ghana saw an increase of over 120 percent in the value of digital transactions between February 2020 and February 2021 compared to 44 percent for the period February 2019 to February 2020 due to the convenience they offer.
This was definitely heightened by the advent of Covid-19, especially during the lockdown.