Kwaku Kwarteng, the chairman of the finance committee of Parliament says the government’s proposal to introduce the E-Levy on some electronic transactions must be accepted.
Kwarteng said it is in the interest of the country that the government undertakes fiscal consolidation hence the need for the introduction of the E-Levy.
Some economists have warned that the introduction of the levy will defeat the government’s digitalisation drive and plans to roll out the digital currency – E-cedi.
But the chairman of the finance committee of Parliament believes the new levy must stay.
Speaking with Nana Yaa Mensah on the Asaase Breakfast Show Wednesday (24 November), he said, “…Ultimately when the politician or the government tries to provide reliefs, somebody at some point will have to pay for that relief. The important thing is that in government you rob Paul here, you pay Peter there; you cut and you paste and you give relief at some point and recover at some point so that you achieve optimal outcomes.”
He added, “If anyone tells you that I can give you reliefs and that it will never come to bear on the public purse, please don’t believe that person. So I think that as we push for a better fiscal regime, we avert our minds to this.
“It is in the interest of Ghanaians that fiscal consolidation happens and that is why I think this E-transaction levy must stay. The government in 2017 removed many taxes and we were excited…”
Presenting the 2022 Budget Statement and Economic Policy in Parliament on Wednesday (17 November), the Minister for Finance, Ken Ofori-Atta said the government has decided to place a levy on all electronic transactions to widen the tax net and rope in the informal sector, the Finance Minister
He said, “Electronic transactions covering mobile money payments, bank transfers, merchant payments and inward remittances will be charged at an applicable rate of 1.75%,” Ofori-Atta said, “which shall be borne by the sender except for inward remittances, which will be borne by the recipient.
“Mr Speaker, this new policy comes into effect from 1 February 2022. The government will work with all industry partners to ensure that their systems and payment platforms are configured to implement the policy.”
Game-changer
Meanwhile, the Deputy Majority Leader, Alexander Afenyo-Markin, has said the E-Levy introduced in the 2022 Budget is a good policy that could be a game-changer for Ghana.
Speaking in an exclusive interview on Asaase Radio Monday (22 November), Afenyo-Markin said: “For me, we need this E-Levy for a long time. We need the roads… so as for a means to get funds to sustain the maintenance and expansion, it is a necessary evil.”
“But if you tax and tax properly and identify the proper tax to impose and you spend that money for people to see the benefits thereof, trust me, you can always win an argument.
“Because now with the 1.75% levy all that Ghanaians expect in spite of the complaint would be to see that works are going on in their various communities and they are seeing increasing spate in the way work is being done, that they are seeing contractors back to site, for me that could be the game-changer,” Afenyo-Markin told Wilberforce Asare.
The Effutu MP believes the introduction of the levy is strategic.
“When you earn your income and government is of the view that imposing a levy or tax on a particular income will not be nuisance and the purpose of it will be to deal with a critical sector of the economy, I think it is on point and it is right to do so.”
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