The hung Parliament is the cause of Ghana’s financial problems – Gabby Otchere-Darko

The hung Parliament is the cause of Ghana’s financial problems – Gabby Otchere-Darko

Gabby Otchere Darko, a leading member of the New Patriotic Party (NPP), has stated that uncertainties surrounding Ghana’s revenue mobilization efforts, such as the e-levy and benchmark reversals, are all contributing to the money market’s jitteriness about Ghana. He also stated that the hung Parliament, with 137 seats each for the National Democratic Congress (NDC), the New Patriotic Party (NPP), and one Independent lawmaker, is causing the same problem.

In a tweet, on Friday, January 14, 2022, Mr. Gabby Otchere Darko stated that “Uncertainties on our revenue mobilisation efforts, including e-levy and benchmark reversals, the nasty nature of our hung parliament are all contributing to make the money market jittery about Ghana. The consequences of our internal points-scoring are greater and against us all”.In the 2022 budget declaration, the E-levy proposal was rejected by the Minority in Parliament.

“Meanwhile, Minority Leader Haruna Iddrisu said during a debate in the House floor on Tuesday, December 7, 2021, vehemently stated that .”We are unable to support the government and we will continue to oppose it,” he wrote.

It will be recalled that in his budget statement, the Finance Minister announced a new levy on all electronic transactions that will be imposed by the government in 2022 to broaden the tax net and bring 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, 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”

According to him, the new E-levy will be a 1.75 per cent fee on all electronic transactions, including mobile money payments, bank transfers, merchant payments, and inward remittances, which will be charged by the sender except for inward remittances, which would be borne by the receiver.

“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”, the finance minister stated.

With regards to the benchmark value, and following criticism from various trade unions, particularly the Ghana Union of Traders Association (GUTA), the Ghana Revenue Authority (GRA) decided to put the reversal of the benchmark policy on hold.

“Following the outcome of a meeting conducted on Wednesday 12th January 2022, the customs Division of GRA has been asked to halt the implementation,” the GRA said in a statement on Thursday.

“Government’s policy directive on removal of reduction of values of imports on selected items until further notice to enable more engagements with all the relevant stakeholders”.

This came after President Nana Addo Dankwa Akufo-Addo ordered a policy halt to allow for additional deliberations. After a significant discussion with other stakeholders, the president’s directive came after the Finance Ministry agreed to further dialogue on the discounted benchmark reversal.

Finance Minister Ken Ofori Atta, trade union representatives, Customs, and the Ghana Revenue Authority (GRA) all attended the meeting on Thursday, January 6 to discuss “acceptable values for importation”. The reversal was set to affect 143 goods from the Ghana Revenue Authority’s three categories.

For several commodities, the benchmark value, which is the amount taxable on imports, was cut by 50%. The government thought that by increasing the volume of transactions, Ghana’s ports would become more competitive. After facing opposition from the Association of Ghana Industries and the Ghana Union of Traders Association, the government decided to reverse its decision (GUTA).

However, trade unions such as the Ghana Union of Traders Association (GUTA) and the Ghana Importers and Exporters Association (IEG) opposed it (IEAG). Sampson Asaki Awingobit, the IEAG’s Executive Secretary, has filed a notice of intent to sue the government over the reversal.

Source: Richard Mensah Adonu | Join our Telegram Group

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