The Government of Ghana has passed its Electronic Transaction Levy commonly known as Electronic Levy or E-levy, a tax applied on transactions made on electronic or digital platforms.
On 17 November 2021, Ken Offori Atta, the Minister for Finance and Economic Planning said the Government of Ghana decided to tax all electronic transactions in the informal sector to cover the tax net. He made this known in the 2022 budget statement and economic policy that was read in the parliament.
1.75% was the rate of the E-levy but was brought down to 1.5% after clamors from the Ghanaian public. Ken Offori-Atta said it could raise about $1.15 Billion which will widen the tax net. According to john Kumah a Ghanaian politician, the money generated from the levy would be used for the payments of contractors in Ghana. He also stipulated that revenue from the levy would be used to support entrepreneurship, cyber and digital security; road infrastructure and provide decent sustainable jobs to about 11 million people in the country. The Government of Ghana said that the introduction of the levy was due to the rise in the use of digital platforms for transactions because of the COVID-19 pandemic. The e- levy was passed in Ghana on 29th March and began this May.
Meanwhile, there have been mixed reactions from Ghanaians after the announcement was made, with a huge number of Ghanaians kicking against it.
Here are a few of the reasons a larger amount of the Ghanaian population think the E-levy is a scam, not valid and should not be implemented.
Ghana as a country is endowed with numerous rich resources such as gold, bauxite, manganese, diamond, timber as well as oil. The masses feel that these resources generated can go a long way in solving all the financial problems the E-levy would be used to solve in the country. While Ghana’s economy is one of the most successful in the sub-region, it has remained heavily dependent on international finance which leaves a dent in Ghanaians as to how the money from the E-levy will be spent.
That notwithstanding, most Ghanaians believe that if the monthly taxes of all public sector workers were put into good use, the economy of Ghana would have a good boost. The Ghanaian government, after taxing its residents on income from employments, businesses and investments leaves the country lacking good roads, hospitals, schools and accommodation for its citizens; and making most Ghanaians feel the country’s resources are not being managed properly, thus making a lot of tongues wage against the E-levy.
Passing the E-levy will drastically beat down the business of most telecommunication companies in Ghana, as the passing of the E-levy bill saw them reducing their charges by 25% so as to neutralize the E-levy charges and bring less burden onto the average Ghanaian.
It is reported that most Ghanaians have begun withdrawing all their savings in their MoMo accounts, as they say they will not be able to pay any charges accrued on their money.
Moreover, most African countries are known for being highly corrupt. Hence most Ghanaians have a hard time trusting that the money that will be accrued from the e- levy will be put to good use because of the corrupt nature of leaders in the country.
People feel it is extremely unfair to tax a student, peasant trader or farmer who wishes to send a little amount of money they have saved to someone, only to be taxed.
Ghana as a country is faced with high corruption, mismanagement of resources and inadequate jobs for the youth, which has seen most of the graduates in the country jobless and searching for work. All these sum up to the reasons a lot of Ghanaians are not in agreement with the E-levy. This was not only being fought by the masses but by the minority opposition in parliament which saw them going to court.
However, the average Ghanaian has come to accept that the E-levy has come to stay as the bill has already been passed for it to commence this May.
By || Solace Awuni (writer at healthtitbits.com and contributor at depunch.com)
Ewurama Acheampoma