Revenue from E-levy is overrated – Seth Terkper
Former Finance Minister, Seth Terkper, has stated that the GHS7billion targeted revenue which is expected to be generated from the yet-to-be-approved E-levy in the 2022 budget statement is overrated.
According to Mr Terkper “…everything else is dependent on loan so the question is what is GHS7billion, how can that become the main thing when you do not have access to the market to borrow.
“That is why I have said the 7billion from the E-levy in terms of resolving our problems is overrated. I see it more in terms of urgent liquidity because it is going to be cash, it is not like it is profit”, Mr Terkper explained while Speaking on the Business Focus with Alfred Ocansey on TV3 Monday, January 31, 2022.
Already, the government through the Information Minister, Kojo Oppong Nkrumah had rejected assertions that the E-levy was going to solve all of Ghanaians problems.
Mr Oppong Nkrumah said, “no government official has said that anywhere”.
The information Minister was reacting to a question at a press conference held by Finance Minister Ken Ofori Atta in Accra on Wednesday, January 19, 2022, on the premise that the E-levy was going to solve all of Ghana’s problems.
The Ofoase Ayirebi Lawmaker said “We have not said that E-levy will solve all our problems so I think the foundation of that question should be quickly dealt with.
“E-levy is one of the revenue measures as part of several revenue measures aimed at raising the resources that we need for the appropriation of about 145 billion. So it is important to put that in context even before we get into answers.”
It is on record that the E-levy proposal in the 2022 budget statement has sharply divided Parliament. The opposition MPs have rejected the proposal, saying it is a disincentive to the growth of the digital economy.
To that end, Minority Leader Haruna Idrissu said, the Minority would not support it in its current form.
Speaking at a post-budget workshop in Ho on Saturday, November 20, 2021, 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 this levy to be charged by the government in 2022 on all electronic transactions to widen the tax net and rope in the informal sector when he was presenting the 2022 Economic Policy and Budget statement to Parliament
“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, 2021, 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 added 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 or 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.”
The new levy mentioned was scheduled to start Saturday, January 1, 2022, but has since faced strong opposition from CSOs and some well-meaning citizens and also failed to be approved by Parliament before it went on recess in December.
Source: Richard Mensah Adonu | Join our Telegram Group
