President Nana Addo Dankwa Addo has expressed concerns about the difficulties he is encountering in generating domestic revenue for development following the resistance by the National Democratic Congress (NDC) and other nonpolitical personalities who are against the E-levy.
Mr Akufo-Addo said he is determined to generate revenue for the country’s development without falling on loans from external bodies yet his effort has been met with opposition.
President Akufo-Addo said these when addressing traditional leaders from Dzodze in the Volta region on Tuesday, 1st February 2022.
He said “Revenues during 2020/2021 went down considerably because of the slowing down of the economic activities that came from the COVID-19. At the same time, government, in order to keep the country going, did incur some expenditures on the free water, the free electricity.
“These were the unavoidable expenses that government had to make.”
He added “These are the efforts that we are now making which are being resisted by the opposition but we will try and close the gap. That is the reason it has become necessary for us to use these measures like this famous tax which has caused so much unnecessary, in my view disputation; nevertheless, we would continue.”
He stressed “I am determined to persevere to make sure we find the means to address some of these issues.
“These are the efforts that we are now making which have been being resisted by the opposition as we try and close the gap. It is necessary for us to do so because that is the only way which some of these matters can be addressed.
“We ourselves have to find the money for our development and that is the reason why it has become necessary for us to use these measures like this famous tax which has caused so much unnecessary, in my view, disputation; nevertheless, we would continue.”
His comments come after the Minority Leader Haruna Iddrisu has said the E-levy policy proposal in the 2022 budget statement 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 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 government with the introduction of that particular e-levy . We are unable to build national consensus on that particular matter.”
Finance Minister Ken Ofori-Atta announced a new levy to be charged by government in 2022 on all electronic transactions to widen the tax net and rope in the informal sector.
“It is becoming clear there exists 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, 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 per cent 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, 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.
By Laud Nartey|3news.com|Ghana