NPP spent GH¢3 billion in 2021 on government machinery without nothing to show

Ivan Kyei Innocent, a political analyst, has said the office of the President and government machinery has allocated and spent over 3 billion Ghana cedis in 2021.

In an interview on Active TV’s Morning Show on Thursday, February 24, 2022, Ivan said, “money allocated to the presidency in 2021 is half of the controversial e-levy income tax”.

Ivan who recounted some budgetary allocation to the presidency since 2016 noted that, “in 2016, before the current government took over, money allocated to the presidency was 79 million Ghana cedis, in 2017, it rose to 119 million Ghana cedis, 2018 it was 135 million Ghana cedis, 2020 it went to 826 million Ghana cedis, and in 2021 it has increased to 3 billion Ghana cedis.

“In 2021 budget, over 3 billion was allocated to the office of the government machinery, without account for what they do at the presidency, these statistics clearly means politicians do not care about ordinary Ghanaians, but to satisfy their fantasies,” he emphasized.

“People over thousand five hundred have been employed at the presidency without knowing what they do, but get paid”

He further mentioned that the estimation of the E-levy income tax is 6.9 billion cedis, while over 3 billion Ghana cedis is blown at the presidency with nothing to show.

Ivan’s comments follow the government’s insistence to introduce an Electronic Transaction.

About E-levy

On 17^th November 2021, the Minister for Finance announced during the presentation of the 2022 Budget Statement and Economic Policy of Government to the Parliament of Ghana, the introduction of an “Electronic Transaction Levy” or “E-Levy” of 1.75 per cent on electronic transactions above GH¢100 (US$16) per day and was expected to take effect from February 1, 2022.

The levy was expected to be applied to mobile money payments, bank transfers, merchant payments, and inward remittances. All charges are to be borne by the sender except in the case of inward remittances where the charge will be borne by the recipient. According to the Finance Minister, Ghana’s total digital transactions for 2020 were estimated to be over GH¢500 billion (about US$81 billion) compared to GH¢78 billion (US$12.5 billion) in 2016.

As a result, the government is projecting to rake in tax revenue of about GH¢6.96 billion (US$1.1 billion) in 2022, and about GH¢26.90 billion (US$4.5 billion) from 2023 to 2025 after the implementation of the electronic transaction levy to help widen the tax net and rope in the informal sector.

However, this announcement has led to different reactions from the industry’s stakeholders, with some of them supporting the tax introduction as a way to collect public revenues while others criticizing such measure and its negative impact on digital payments and on the digitization journey that Ghana is championing.

The government has since been holding town hall meetings across the country to explain the E-levy to Ghanaians.