E-levy mass education: Urgently required!!!

On Thursday, 31st March, 2022, the President of the Republic, Nana Addo Dankwa Akufo -Addo signed the ‘controversial’ Electronic Transaction Levy (E-levy) Bill into law.

This was followed by its ‘controversial’ passage by Ghana’s hung Parliament on Tuesday, 29th March, 2022.

So, it is now a new law in our nation’s revenue generation books.

Being a brand new tax law which has generated a lot of nation-wide ‘heat’ and ‘misconceptions’, many Ghanaians hold the view that it must be properly and adequately explained to the mass of the people before its application.

According to the Minister of Finance, Mr Ken Ofori-Atta, the implementation of the E-levy begins on the 1st of May, 2022.

So, really the E-levy takes effect in May and it is expected that by that time, the Ghana Revenue Authority would have fully prepared to begin its actualisation process.

The E-levy now imposes a 1.5 per cent tax on a value of daily electronic transactions above GH¢100.

This new tax falls in the bracket of Mobile Money (MoMo), merchant transactions, bank transfers, all points of sale and inward remittances.

In November 2021, the Finance Minister announced Government’s plan to introduce the E-levy during the 2022 budget presentation to Parliament.

He stated that the E-levy was necessary to “widen the tax net” which would increase the country’s tax to GDP rate from 13 per cent to 16 per cent or more.

Contrary to the Government’s good intentions and positive predictions, critics say the imposition of the E-levy would derail the development of e-commerce in Ghana.

As the Government insists that the E-levy would be a ‘turn-key drive’ for Ghana’s ailing economy, especially with respect to the country’s high debt profile, a section of the Ghanaian populace have ‘saluted’ the new levy with disapproval.

For instance, the Opposition legislators in Parliament are still vehemently opposing the new tax , claiming that “it will exacerbate the country’s harsh living conditions” , besides bankrupting small enterprises.

Some protestors against the E-levy, calling themselves Coalition of Concerned Ghanaians also took to the principal streets of Accra and ended up in Parliament with a petition.

Other critics also say , the implementation of the E-levy would have negative impact on general businesses and impede the functioning of Ghana’s financial system and the real economy.

They argue that there would be a return to increased cash transactions and might ‘entice’ Ghanaians who do not have bank accounts, back to the old bad days of their financial exclusion.

Some analysts contend that the stance of the Opposition legislators on the E-levy, might have recently influenced many people to “panic-withdraw” their money from their mobile money wallets so that their funds could escape taxation.

Dr Benjamin Otchere-Ankrah, a Governance lecturer at the Central University says:”The Finance Minister has promised Ghanaians that when the E-levy is collected, he and his Government will be accountable to the people. We will hold him responsible to that statement.

” The Finance Minister must be accountable to the citizens of Ghana on what and how the E-levy would be used for, to the benefit of our country”, stressing that “he must remain truthful to Ghanaians.”

A former Deputy Managing Director of the National Investment Bank,  Mr Alfred Thompson, also contends that, “Ghana cannot continue to borrow funds from external sources to develop, therefore, the E-levy is timely to bolster the economy through revenue generation.

“However, Ghanaians must demand probity and accountability  from Government when the implementation of the E-levy begins.”

Others are also asking the Government to boldly inscribe “E-levy” on every visible project that will be funded by the new tax and cited the inscription of “HIPC” on projects funded by the HIPC funds during President Kofuor’s regime.

The Government, however, assures that the new levy will hugely inure to the benefit of the country, emphasising that it will principally be used to support the country’s infrastructural development.

Indeed, this column supports the view that the Ministry of Finance should mount intensive series of country-wide mass education campaigns, using the appropriate mass media channels, communication specialists and tax experts to explain the new tax system to ease its understanding and application.

It is the contention of this column that failure to properly educate the mass of the people about the new tax will result in non-achievement of the purpose for which the tax was ‘crafted’ and the target set for its generation.

The Finance Ministry should, therefore, “invest ” adequately in the mass education of the people to whet their appetite to be ‘salivating’ to ‘taste’ the new ‘tax-soup’ with ‘style’.

Contact email/ WhatsApp of the author:

asmahfrankg@gmail.com (0505556179)

By G. Frank Asmah