The 1.5% Electronic Transfer Levy, known as E-levy, has failed to give the government the intended revenue projected.
This is according to a leading member of the ruling New Patriotic Party (NPP), Gabby Otchere Darko.
The levy which came into force on May 1, 2022, was marked to be used to support entrepreneurship, youth employment, cyber security, digital and road infrastructure, among others.
President of the Republic of Ghana, Nana Addo Danquah Akufo-Addo, in an interview on BBC’s Focus on Africa with Peter Okwoche in April 2022 while defending the levy, said experts in his government see the Electronic Transfers Levy (E-levy) as necessary for the economy of Ghana to rebound.
“We have experts in government as well and we think it (E-levy) is necessary… We are talking about taxing an industry and transactions where there are a lot of values being created and we want to also bring that value to government coffers. It’s not only Ghana that has something like a digital tax, many many many countries.”
But after weeks of its implementation, Gabby notes that less than GHC60 million has been accrued from the levy despite the GRA’s boast of raking some one million cedis from one entity in just a day.
“As of the close of Thursday, we had had the invoice of a number of charging entities and one of the charging entities which owns more than 70% of the population had in excess of GH₵1million for just one day. So assuming all the others are not paying and this entity alone sends GH₵1million every day for 30 days. This means we are getting GH₵30million per month from just one charging entity”, Head of Project Unit at GRA, Isaac Kwabena Amoako said according to JoyNews report.
In a series of tweets, Gabby said, “After 5 months of stalemate and bashing, the e-levy, after implementation, is delivering only 10% of estimated revenues; our revenues remain very low as compared to the rest of the world; debt levels dangerously high, cedi, like most currencies, struggling against the US dollars”.
With the rising cost of food amidst bounty harvest and a growing economy amidst dwindling investor confidence, Gabby asked, “What options are open to government? The question should rather be: what option, if adopted, will re-inject investor confidence in our economy? Even if we find the $3-5 billion required, will that help? E-levy which was to have given us some 600m by now has done less than 60m”.
He predicts that Ghana may soon have to borrow to pay wages.
Gabby now explores an International Monetary Fund (IMF) programme, an option the government kicked against while seeking to pass the E-levy.
“There’s, understandably, a national aversion to an IMF program, because of the history of conditionalities which attack sacred cows like jobs and social interventions. Akufo-Addo will not sacrifice free SHS and other critical welfare policies to help the poor for any assistance.
“…I am not for an IMF program that throws peanuts at us but imposes conditions that will end up hurting the poor, jobs and businesses more. Covid-19 and War in Ukraine are not of Africa’s doing but more to our doom. A program that pretends it is all our doing is doomed to fail”.
“Am I against an IMF program in principle? No”.
Source: opemsuo.com/Hajara Fuseini