The proposed Electronic Transaction Levy was contained in this year’s financial statement presented to Parliament by the Finance Minister, Ken Ofori-Atta on November 17, 2021.
This tax will attract 1.75 percent on mobile money transaction of GHS 100 and above.
Normally, the budget must be debated and passed in Parliament, but this time round the Minority in Parliament refused to pass this budget because they contend that the E-Levy is a fleece on Ghanaians since the telcos are already taxing the people.
The minority says capital cannot be taxed or one item cannot be taxed twice.
The minority thinks the GHC6 .9 billion revenue that the government intends to get can be raised through other means without necessarily burdening the people who are already impoverished.
Since its introduction in Parliament, the House has not been on the same pace, causing the brawl that happened the night before the House was forced to recess.
After turning deaf ears to the minority on consulting the public and other stakeholders since they would be at the forefront last year, government finally decided to hold a Town Hall Meeting to sensitize Ghanaians and take feedback on the levy.
According to a former Deputy Minister of Finance, Cassiel Ato Forson, the E-levy can be termed as the “most unpopular tax ever introduced in Ghana” with all the hullabaloo surrounding it.
“The fact is, IMF today, will give Ghana up to 3 billion dollars In fact, Dr. Assibey was overly generous when he said the E-levy is going to give us 5 billion Ghana cedis, he is making an assumption based on government official numbers that they’re going to get GHC6.9 billion. The Telcos have confirmed that the maximum government can get from this levy if they are successful, is 3 billion Ghana cedis. Already, first month is gone, second is about to go, this is a bill that has received public bashing ever. It is the most unpopular tax policy ever in the history of this country.”
He is in support of the government calling on the International Monetary Fund (IMF) to assist the country solve its economic challenges.
Mr. Forson goes on to say that, the government will not be able to bring the economy back to it’s feet with just the estimated returns from the levy.
Mr. Forson argued that Ghana’s economic situation will deteriorate further if the government fails to seek financial support from the IMF.
“Our debt levels are not sustainable. Our credit levels are going down. If care is not taken, Moody’s is going to downgrade Ghana further. The very IMF that they are running away from is the same institution that gave us the 2 billion US dollars in the space of two months. We are surviving as a country because of the same IMF. The government should not think that implementing the e-levy will solve our problems. The debt levels are so high.”
Dr. Forson said calls for Ghana to resort to the IMF for assistance is justified as it provides the country with a chance to return to sustainable debt levels.
“Ghana is in a mess, and I can assure you that every single minute that they delay in placing that phone call [to the IMF], our economic situation deteriorates, and it is going to deteriorate further [without it]. The government must heed that advice and make that decision [to go to the IMF]. It has been long overdue.”
A former New Patriotic Party Member of Parliament for New Juaben South, and a one-time Chair of the Finance Committee of Parliament, Dr. Mark Assibey Yeboah has also called on the government to reconsider its decision not to go back to the IMF.
He maintains that the government’s insistence on passing the Electronic-Transaction Levy to reach its revenue target is not the way to go, given the existential economic challenges.
In an interview with Citi News, he said, “There is nothing wrong with going to the IMF. Ghana is a member of the IMF so what is wrong going to ask for support when we are in difficulties to go and pool resources. If I was the finance minister, I will be convincing the President that it is about time we went back.”