Minister of Finance and Economic Planning, Ken Ofori- Atta, yesterday announced government’s plan to review the Electronic Transactions Levy (E-levy) Act and specifically reduce the headline rate from 1.5 per cent to one per cent(1%) of the transaction value as well as remove the daily threshold.
Ofori-Atta disclosed this during the presentation of the 2023 Budget Statement and Economic Policy on the floor of Parliament.
The E-Levy is a Levy on all electronic transfers of money apart from those excluded by law.
It was introduced to enhance domestic tax mobilisation and expand the tax base and provide an opportunity for everyone to contribute towards national development.
Collection of E-levy started on May 1, 2022 and so far, it has GH₵328.80 million as at the end of September 2022.
The Electronic Transfer Levy Act, 2022 (Act 1075) imposes a levy of 1.5% on electronic transfers
The Levy is charged to the transferor at the time of transfer.
The Levy is charged by the entities listed in the First Schedule to the Act.
It must be established that if the 1.5% was slapped on all transactions which was the original idea, the expected revenue would have been met.
However, stiff opposition to e-levy forced the government to exempt a greater chunk of transactions.
In addition to the exemptions, some people have also found a smart way of evading e-levy.
Desperate attempts by some customers to avoid the E-Levy have triggered an increase in cash-in or deposit transactions.
Since withdrawal from Momo wallet is exempted from E-Levy, anytime people want to send money to someone, they tell the person to go to an agent and perform a “remote” cash out.
The sender then sends his/her ID number, and transaction is through.
These and other strategies have affected the revenue generation.
Data from the BoG indicates that decline in the value of transactions is minimal.
Therefore, without exemptions and evasions, revenues would have been closer to figures projected.
Ofori-Atta also said that as part of an aggressive domestic revenue Mobilisation, Government would fast-track the implementation of the Unified Property Rate Platform Programme in 2023.
Finance Minister, Ken Ofori-Atta announced that all 2.5 million extremely poor individuals as estimated by the Ghana Living Standards Survey (GLSS 7) will benefit from the Livelihood Empowerment Against Poverty (LEAP) Programme by 2024.
In addition, he said, while improving efficiency through digitalisation and assessment, Government would, in 2023, increase the value of the LEAP grant from the average of GHC 41.75 per household to GH¢95.19 bi-monthly.
Ofori-Atta indicated that since its inception in 2008, LEAP had supported extremely poor and vulnerable households; increasing beneficiary coverage from 143,552 in 2015 to 344,389 households comprising 1,827,035 individuals as of September 2022.
“We will not renege on our responsibilities towards the vulnerable and socially excluded and the implementation of our various social protection programmes will be expanded,” he assured.
The Finance Minister also announced that the Ghana School Feeding Programme (GSFP) will be sustained and the feeding grant will be increased in 2023 to reflect the current cost of living.
“The Ghana School Feeding Programme which provides one hot nutritious meal each day for 3,448,065 beneficiary pupils in public basic schools as of December 2021 will be sustained. “In 2023, the feeding grant will be increased to reflect the current cost of living. The programme will also strengthen domestic production by sourcing locally produced food from the National Buffer Stock company,” he said.
On the Capitation Grant, Mr Ofori-Atta said the abolishment of the charging of fees and levies in all public basic schools had contributed to a steady increase in enrollment over the years.
He emphasized that the Government would strengthen its monitoring regime to address teething challenges in the implementation of the policy, including the timely release of the grant, misuse of funds, transparency and poor bookkeeping and value of grant amount.
The government, in 2005, abolished the charging and payments of all forms of fees/levies in all public basic schools and replaced them with the capitation grant.
The Government is pursuing an Economic Enclave Project to provide support for the cultivation of up to 110,000 acres of land in the Greater Accra, Ashanti, Central, Savannah and Oti Regions.
The initiative, under the Ghana CARES Programme, seeks to expand the production in rice, tomato, maize, vegetables and poultry.
Agriculture and food processing
Government is looking to shift some of that economic activity away from consumption toward agriculture and food processing.
The institutions are: the Ministry of Food and Agriculture (MoFA), Ministry of Energy, Ghana Irrigation Development Authority (GIDA), 48 Engineers Regiment of the Ghana Armed Forces (GAF) under the Ministry of Defence, the National Entrepreneurial and Innovation Programme (NEIP) and the National Service Secretariat (NSS).
The Ghana CARES Programme is a GH¢100 billion development initiative designed by the Government to mitigate the economic challenges brought on by the coronavirus pandemic.
It is meant to stabilise, revitalise and transform the country’s economy to create jobs and prosperity for the citizenry over a three-year period, with focus on commercial Farming, light manufacturing, fast-track digitisation, housing and construction.
Mr. Ofori-Atta revealed that the Economic Enclave Project would engage interested private sector actors to expand agricultural production and processing in the Asutuare-Tsopoli Economic Enclave area based on a partnership framework.
The same approach will be adopted for the lands secured in the Ashanti, Central, Savannah and Oti Regions.
Government has to make strenuous efforts to meet import bill, which exceeds $10 billion annually.
Per data from the Ghana Trade Advocacy Network, values for various products imported includes tin tomatoes-$1 billion, rice-$800 million, Sugar and confectionery-$300 million, flour-$600 million, poultry and meat-$400 million , fish-$245 million, fresh tomatoes from Burkina Faso – $100 million and toilet rolls and tissue-$100 million.
The rest are cooking oil-$300 million, pharmaceutical and chemicals-$750 million, soaps and cosmetics, plastics-$500 million, paper-$600 million, tiles and ceramics-$200 million, iron and steel products-$600 million, cars and spare parts-$2 billion, furniture-$250 million, textiles and apparel-$250 million, home appliances-$900 and beverages-$200 million.
