Government has assured that the introduction of the Electronic Transactions Levy (E-levy) will provide opportunity to generate more revenue to sustain its flagship programmes.
It has also assured the public that it will ensure transparent accounting for the proceeds to be realized from the implementation of the levy.
The novel tax regime is intended to help transform infrastructure across the country, including building roads, market amenities, health educational facilities, among others
Additionally, the E-Levy is expected to help deliver massive numbers of jobs through industrialisation and entrepreneurial programmes.
Burden-sharing
Speaking at the first government Town Hall Meeting on the E-Levy initiative in Koforidua yesterday, the Minister of Finance, Ken Ofori-Atta, underscored that the levy would provide government with increased revenues to sustainably invest in key sectors of the economy and support its flagship programmes in entrepreneurship, youth employment, and fund strategic 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.
“We want good roads, digital infrastructure, but we need to factor in the devastating effects of Covid-19. Government was doing well. The 1.75% levy is to support employment, which is key and affects all of us. It will also improve productivity and create that modern society we have been yearning for,” he added.
He further explained that government is introducing the E-Levy to include the section of the population that remains outside the formal economy, largely untaxed, and shift from the traditional to digital payments systems in improving domestic revenue mobilization to support rapid development.
“We truly listen to the people who we govern to consider our decisions in every policy we want to introduce. However, the opposition will oppose anything the government introduces and encourage people not to support, whether good or bad. We don’t want to go back to the days where we couldn’t pay nurses, teachers just because some people couldn’t manage the affairs of the country properly,” he added.
Dwindling revenue
He attributed the country’s dwindling revenue streams to the slowdown in business activities occasioned by the coronavirus pandemic, explaining: “that is why 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”.
He stated that the country lags behind most of its peers in the West African sub-region as far as tax to GDP ratio is concerned.
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, he revealed.
To this end, the Minister explained 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 programmes such as the YouStart, while funding road and other projects”.
Transparent accounting
Taking her turn to address the meeting, the Minister of Communications and Digitalisation, Ursula Owusu-Ekuful, also assured that there would be transparency and accountability in the usage of proceeds from the levy.
Mrs. Owusu-Ekuful said government intends to use the levy to better the lives of Ghanaians by investing into critical sectors of the economy such as youth employment and job creation.
“Government, in its wisdom and after broad consultation, has introduced a safety net for the poor and vulnerable, whereby transactions less than GHSC100 are exempted from the E-Levy to ensure that they are not severely impacted.
“What we are bent on doing as government is to put the monies that accrue from the levy into good use and make sure at every point in time that Ghanaians know what we are using the monies for,” he said.
Present at the Town Hall Meeting were the Minister for Information, Kojo Oppong Nkrumah, Deputy Majority Leader, Alexander Afenyo-Markin, and the Eastern Regional Minister, Seth Kwame Acheampong.
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