Amidst several calls for the scrapping of the electronic transfer levy following another revision in the revenue target for the levy, some economists insist the levy should not be scrapped.
The government had hoped to rake in about GH₵6.9 billion from the e-levy, but the figure was revised downwards to about GH₵4.9 billion following the delay in the passage of the e-levy bill.
However, in the recent mid-year budget review, the target was slashed again to GH₵611 million following the underperformance of the levy three months into its implementation.
Although this development has intensified calls for the levy to be taken off, Economist Courage Boti says the levy should be monitored for a while before taking a firm decision on it.
“The revision of the target for the e-levy and by extension, most of the other new revenue lines are not at all surprising. What is surprising is the significant reduction but yet still, I do not think it was right to slash the revenue target at this point. Every policy takes time to take off and the negative reactions leading to the low collection of the levy is anticipated, plus the implementational challenges.”
“So it will pay to monitor the data over a longer period to see the trends then that will inform the decision to continue or not to continue. It’s the right call to continue with it till the end of the year, then the data can speak for itself as to whether it’s a tax line worth keeping or not,” he noted.
The levy, which was initially pegged at 1.75 percent on mobile money and other electronic transactions, was later reduced to 1.5 percent following protests from various stakeholders.
After the delay in the passage of the e-levy bill by Parliament, it was predicted that the levy will not achieve its intended target.
Indeed, it’s just been three months into the implementation of the levy, and it has underperformed woefully.
Figures from the 2022 mid-year budget review have also disclosed that the new tax which many Ghanaians have opposed vehemently has only raked in GH₵93.7 million, from the GH₵1.46 billion target for the first half of this year.
It is for this reason that the government has revised again, the e-levy’s revenue target for the year 2022 to GH₵611 million. This cut of almost 90 percent was also stated in the mid-year budget review document.