1.75 tax will be imposed on electronic transactions
Growth of digital financial transactions will be affected by new tax
Chief Executive Officer of Ghana National Chamber of Commerce and Industry, Mark Badu Aboagye, has said the government’s revenue generation measures should consider the effects of businesses in the country.
Speaking in an interview on PM Express, he said the government should adopt a gradual approach instead of using radical methods in revenue generation.
This he said was because “the revenue projections for us is too aggressive and of course it is going to have an effect on businesses who are going to pay the taxes.
“Tax revenue with GDP ratio now is about 12%, they want to move it from 12% to 15%, that 3% is huge. The question you need to ask yourself is who are those going to pay the taxes and then I mean income taxes are there but then the large component of the tax revenue comes from businesses. That is why you need to look at the budget, the tax aspect of it largely is going to be borne by business,“ he added.
Mr Aboagye indicated that although he is not entirely against revenue generation, he, however, wants the government to take a second look at the businesses that are paying the imposed taxes.
His comments follow the various tax measures announced by the Finance minister, in the government’s bid to widen the tax net.
Key among them is the introduction of a 1.75 % levy on all electronic transactions.
According to Badu Aboagye, the 1.75% levy is generally going to affect business operations in the country by reducing their profit levels and capital.
He thus argues that the growth of mobile money can be highly attributed to huge transactions made by businesses hence those businesses will be affected more than even individuals that use the service.
He said, “if you look at the MOMO, it has grown not because of the individual but because of the huge transaction that businesses are doing… so if you take 1.75% just by an individual who is paying a little bit over GHS 100 as the threshold the money may look small, but for a business is constantly sending money through MOMO cumulatively is a big cost.” Read Full Story