Finance Minister, Ken Ofori Atta, has disclosed the Electronic Transaction Levy (E-Levy) will be re-submitted to Parliament when the House resumes sitting next week.
A team from the Ministry, he said, in collaboration with other sector Ministers and key government officials have embarked on a public engagement and sensitization campaign across the country.
According to him, government intends to communicate clearly on the proposed mechanics of the E-levy and its potential benefits to the Ghanaian people within the spirit of burden-sharing that must guide the ‘Ghana beyond Aid’ development agenda.
He averred that after the extensive consultation and engagements the Ministry hopes to join hands with Members of Parliament to approve the levy on a consensus basis.
Speaking at the Ministry of Information on Wednesday 19th January, 2022 when the Ministry of Finance took its turn at the Meet the Press series, Mr. Ken Ofori-Ofori Atta disclosed introduction of the E-Levy is the most efficient way for the government to bring all Ghanaians into the tax net.
According to him, considering the technology and the structural changes in the tax handles over the past years and the fact that Ghana has over 40.5 million mobile phone subscribers and over 17.1 million active mobile money subscribers, the E-levy will be one of the key tax measures of the government.
He stated that total value of transactions on mobile money grew by 65% between 2016 and 2021; rising from GH¢78.5 billion in 2016 to an estimated GH¢953.2 billion in 2021.
He noted that in comparison, Ghana’s revenue to GDP ratio has languished between 11.3 per cent in 2016 to 12.5 per cent in 2021 when compared to 20 per cent with neighbouring countries and also a VAT revenue of 11-13 per cent compared to 18-44 per cent of peers.
This, he stressed, is unsustainable to anchor the extensive transformation agenda of the government, which is further compounded by the fact only about 2.4 million people pay personal income tax out of a population of 30.8 million Ghanaians.
He argued Ghana is at a stage in its development where Ghanaians must now all play their part and put their shoulders to the wheels, particularly where the Greater Accra is responsible for 90% of revenues of the state; where some 60,000 professionals do not pay direct taxes; where property taxes do not exist and where the wealthy talk about regressive taxes to detract from the non-payment.
He said, “We simply cannot build forward better with a system where everyone takes, and most do not give back. The two major sources of income to pay for expenditures for any government are taxes and borrowing. The balance will tilt one way or the other depending on the capacity to mobilise revenues.”
“The ability to close loopholes and the willingness for all citizens to be protectors of the public purse and our capacity to prosecute offenders but unfortunately, we have paid the price for low resource mobilisation through insufficient investment.”
According to the Minister, though the public sentiment is clear, the state must still collect its taxes to avoid debt accumulation, build roads, and get the youth to work.
“So we collect, we pay, we account for it, we discourage our neighbours from avoiding taxes and burden-share. If we are to do so and still achieve our ambition towards rapid development to expand the economy to create jobs and prosperity for the masses, then the project of burden-sharing for shared prosperity must be embraced by all,” he stressed.
The Finance Minister averred that relative to peers, Ghana has invested less in infrastructure and indicated that between 1961-2020, Ghana’s average Gross Fixed Capital Formation Ratio was 17%, compared to 25% in sub-Saharan Africa; and moreover, between 2017 and now the tax to GDP has hovered between 11%- 13% compared to those of peers who were between 16%-20%.
According to him, Ghana is paying the price for low resource mobilisation through insufficient capital investment and as such has to borrow more than others to finance investment in infrastructure and the provision of social services and security.
He stressed the E- Levy is therefore a necessary tool to increase Ghana’s tax to GDP from 13% to 16% and ensure the state moves towards a more sustainable debt level and revenue mobilization to invest in entrepreneurship, youth employment, cyber security, digital and road infrastructure and also help support economic growth.
Source: Mypublisher24.com