Clarifying issues regarding the 2022 Budget Statement and Economic Policy he presented before Parliament on Wednesday, November 17, 2021, the Finance Minister, in an interview on Peace FM's ''Kokrokoo'' Tuesday morning, stated emphatically that the e-levy will not be removed.
Expanding Tax Net
The Minister, on the floor of Parliament, stated that, as a part of government's measures to expand the tax net; ''after considerable deliberation, Government has decided to place a levy on all electronic transactions to widen the tax net and rope in the informal sector. This shall be known as the “Electronic Transaction Levy” or “E-Levy”. Electronic transactions covering, mobile money payments, bank transfers, merchant payments, and inward remittances will be charged at an applicable rate of 1.75 percent, which shall be borne by the sender, except inward remittances which will be borne by the recipient''.
He continued; ''Mr. Speaker, to safeguard efforts being made to enhance financial inclusion and protect the vulnerable, all transactions that add up to GH¢100 or less per day (which is approximately GH¢3000 per month) will be exempt from this levy.''
Hon. Ofori-Atta highlighted the importance of the e-levy emphasizing ''a portion of the proceeds from the E-Levy will be used to support entrepreneurship, youth employment, cyber security, digital and road infrastructure, among others''.
This levy is to take effect from 1st February, 2022.
''Government, therefore, calls on all industry partners to ensure that their systems and payment platforms are configured to implement the policy by 1st February, 2022'', the Minister directed.
However, the introduction of the e-levy, a taxation on all electronic transactions, has become a contentious issue in the country with the Minority in Parliament fighting against it while the Majority are in favor of this new levy.
The Minority strongly opposes this initiative stating it will worsen the plight of Ghanaians and also discourage the use of electronic means to transact business.
They dread mobile money transactions will reduce drastically which will affect the digitization transformation of Ghana.
E-Levy Won't Be Removed
From the posture of the Finance Minister on Kokrokoo today, he is unperturbed by the opposition against the e-levy.
He strongly holds it will take effect as scheduled and be used for its intended purposes of developing the nation.
''You don't hear anything other than remove this (e-levy). That's not how to govern a nation. When you look at the budget, this is not the only tax we have introduced. We removed toll booth...The threshold we use to tax individual business has been increased so that we will give some space to them. We also did the flat tax rate. So, it isn't like the government doesn't think about the people.
''When you enumerate the things we have done within the five years are numerous but we can't also isolate ourselves from the world. You all know how the supply chains have caused confusion resulting in high container prices. You know how the fuel price is going that OPEC and so forth are strictly on it. America has even released their reserves to be able to counter. We also don't know the direction that the COVID-19 is taking us'', he told Kwami Sefa Kayi.
Read Full Story