President Akufo-Addo has attributed the passage of the controversial electronic transaction bill to the country’s low tax-to-GDP ratio.
According to the President, Ghana compared to its West African peers has the lowest tax-to-GDP ratio of about 13% which is below the region’s known tax-to-GDP ratio of 18%.
Speaking in an interview on BBC Africa, the President averred the digital economy is the biggest emerging economy in the country that has not been taxed for several years now.
To him, taxing the digital economy and particularly mobile money transactions through the E-Levy bill, is bringing the digital economy under the net of taxation for national development.
“The digital economy, mobile economy is emerging as the biggest economy in the country and for a long period it has not had any taxation at all, so its important now that it also come into the net (taxation).
“Our country has the lowest tax to GDP ratios of any country in West Africa, the ECOWAS area tax to GDP average is about 18%, Ghana we are at 13%, if anything at all we are undertaxed.
“They [Ghanaians] are not already impoverished (poor), we are talking about taxing an industry where a lot of value is being created and we also want to bring the value to government coffers.
“Ghana is not the only country that has E-Levy, many countries have it, people never like taxes, I don’t know of any group of people especially businesses that when taxes are brought to them they are happy,” he argued.
President Akufo-Addo on March 31, 2022, signed the E-levy Bill into law.
As a result, the Bill, which was passed by Parliament on Tuesday, March 29, 2022, has now become a binding law that will be operationalised as a revenue measure across the country.
Background to the Presidential assent
Parliament approved the controversial Electronic Transactions (E-Levy) Bill on Tuesday afternoon.
This decision was reached after the Consideration Stage was completed by a Majority-sided House on Tuesday, March 29, 2022.
It was considered under a certificate of urgency.
The Bill was adopted at a reduced rate of 1.5% from the initial 1.75% amid a Minority walkout.
The tax, which has become a subject of debate among Ghanaians is expected to rake in close to GHS 6 billion in tax revenue for the country.
The Ghana Revenue Authority (GRA) has already hinted that its structures have been revised and ready to ensure mobilization of the income.
Source: Norvanreports
