Prof. Peter Quartey, Director of the Institute of Statistical, Social, and Economic Research (ISSER), has stated that revenue from the e-levy will benefit Ghana more than relying on the IMF for assistance.
On the Super Morning Show on Wednesday, he stated that, despite the drawbacks, the e-levy will generate significant revenue for the state at a time when the country is experiencing economic difficulties and has been downgraded by Fitch and Moody’s.
He believes it is better for the government to generate its own revenue rather than rely on the IMF, which will propose “harsh” measures that will harm the economy.
“You’ll recall that one of the reasons for the downgrade was concern that we wouldn’t be able to meet the required revenue, so there will be a revenue gap, but the e-levy will help to balance things out.”
“Having passed the e-levy will provide some assurance that the revenue gap will be plugged in some way or another, perhaps not completely, but there will be some revenue realized from this,” he said.
He also argued that, at a time when youth unemployment is still very high, it would be risky to comply with an IMF recommendation of freezing employment, should that be part of the Britton Woods institution’s proposed measures.
“I don’t think it bodes well for the future.”
“I don’t believe it bodes well for us as a developing country.” So, if we can find ways to raise revenue and generate revenue, I believe it will be preferable to some of these harsh measures,” he emphasized.
His statement was made in response to Parliament’s passage of the Bill on Tuesday, March 29, 2022.
Despite the benefits highlighted by the Professor, he stated that the rate charged, which is 1.5 percent, may deter consumers from patronizing transactions affected by the levy.
“If you’re going to tax, you should be very careful with the rate at which you tax because there are other options,” he said. “As for me, this is why we recommended that a rate below 1% is something that most consumers will cope with, but as the rate rises, be assured that people will find alternatives and you may not be able to realize the revenue earmarked.”
On Tuesday, March 29, 2022, Parliament approved the contentious Electronic Transactions (E-Levy) Bill.
This decision was made after a majority-sided House completed the Consideration Stage.
It was taken into account under a certificate of urgency.
During a Minority walkout, the Bill was adopted at a lower rate of 1.5 percent, down from the initial 1.75 percent.
President Akufo-Addo is expected to give his approval for the Bill to become law.