Minister for Finance, Ken Ofori-Atta has said the Electronic Transactions Levy (E-levy) being introduced by government will offer the country enough revenue to sustain and keep government’s flagship programmes on course.
Speaking at a government Townhall Meeting in Koforidua yesterday, Thursday, January 27, 2022, Ken Ofori-Atta said the levy will provide government with increased revenues to sustainably invest in key sectors of the Ghanaian economy and support government flagship programmes in entrepreneurship, youth employment and fund infrastructure projects.
“We must find a way to what they call burden sharing. So, let’s dig deep in ourselves. Nobody likes taxes but if you look at our debt situation, we need the levy to raise our own money, to build the roads we are all looking for and fund all other key government programmes in entrepreneurship, youth employment, and infrastructure,” he said.
Ghana lags behind most of its peers within the West African sub-region as far as tax to Gross Domestic Product (GDP) ratio is concerned. With dwindling revenue streams attributable to the slowdown in business activities occasioned by the coronavirus pandemic, government through the 2022 Budget Statement and Economic Policy introduced the E-levy, the subject of which has become an issue of controversy and sparked a national conversation on payment of taxes.
While Ghana is doing below 15 percent, countries in the sub-region like Cote d’Ivoire and Nigeria are hovering around an average of 18 percent, raising questions on whether the E-levy is the appropriate tax measure to help government shore up its revenue inflows to fund its projects.
Explaining this, the Minister noted that the levy when passed will increase Ghana’s Tax to GDP Ratio from 13 percent to 16 percent indicating that the proceeds from the levy will be used to support government such as the YouStart and fund road projects.
Present at the Townhall Meeting was the Minister for Communication, Ursula Owusu-Ekuful, Minister for Information, Kojo Oppong Nkrumah, Deputy Majority Leader, Alexander Afenyo-Markin, Eastern Regional Minister, Seth Kwame Acheampong,
Drawing similarities with the Communication Service Tax (CST) introduced under former President John Agyekum Kuffour’s administration in 2008, Mrs. Owsusu-Ekuful said when the CST was introduced, it faced similar opposition as the E-levy. However, despite the stiff opposition to the CST, several years on, the country has realized that the dangers raised against the CST were unfounded as it has become a major source of revenue for government.
This she gave the assurance that based on the country’s experience with the CST and lessons from other African countries, government is confident that the E-Levy will not bring about any negative changes in consumer behavior as has been speculated by industry players and people opposed to the levy.
On his part, Mr. Afenyo-Markin emphasized that the levy provides Ghanaians with an opportunity to contribute to Ghana’s economic and infrastructural development. He said the E-levy will put government in a better position to provide for the needs of Ghanaians.
govt holds major town hall on E-levy, assures transaction will help sustain programs *
