The Ministry of Finance has disclosed that government will not withdraw the 1.5 per cent levy on electronic transactions, despite its application to the International Monetary Fund (IMF) for economic refuge.
This was contained in a statement released by the Ministry, addressing key questions regarding government’s ongoing engagement with the Fund.
The Ministry further explained that government would add the proceeds from the E-Levy to the support from the IMF to salvage the economy.
Addressing the question of whether the levy would be scrapped, the Ministry emphatically said, “NO”, adding that “The IMF lending to Ghana will be for balance of payments support (i.e. to shore up the international reserves)”.
Portions of the statement reiterated government’s commitment to ensuring the smooth operationalisation of all taxes, including the E-Levy, to ensure that in addition to the IMF’s resources, “government can continue to support its developmental goals on its own while ensuring that tax-to-GPD ratio increases to the peer range of 16%-18%”.
It added: “An IMF-supported programme is likely to encourage the government to investigate the factors hindering the success of the E-Levy (including by providing technical assistance if needed) and come out with strategies to improve it”.
The Finance Ministry also added that, additionally, other tax measures could be considered for the medium-term.
Meanwhile, government’s decision to seek economic refuge from the Fund has been received with mixed reactions as some, especially members of the National Democratic Congress (NDC), argue it has been long overdue.
Some have also expressed concerns over what the move could mean for public sector jobs and social programmes, with organised labour kicking against the decision.
A team from the International Monetary Fund will arrive in Ghana today, Wednesday July 6, 2022, to commence negotiations with the government on the modalities for a package to support Ghana’s economy.
On July 1, 2022, President Akufo-Addo formally authorised the Minister for Finance, Ken Ofori-Atta, to commence formal engagements with the International Monetary Fund (IMF).
A statement signed by the Information Minister, Kojo Oppong Nkrumah, said the President’s directive to the Finance Minister followed a telephone conservation between President Akufo-Addo and the IMF managing director, Kristalina Georgieva, conveying Ghana’s decision to engage with the Fund.
“The engagement with the IMF will seek to provide balance-of-payments support as part of a broader effort to quicken Ghana’s build-back in the face of challenges induced by the COVID-19 pandemic and, recently, the Russia-Ukraine crises,” the statement had said.