A former Deputy Minister of Information, Felix Kwakye Ofosu, has said the Akufo-Addo administration is confused over revelations that the e-levy proposal is going to enrich an entity with over 40 million dollars.
Felix said he had earlier indicated that the amount of money that would be generated from the levy will be given to the entity that collects the revenue.
In a Facebook post n Sunday, December 5, he said “The Akufo-Addo/Bawumia government is in sixes and sevens over its responses to the discovery of a GHS 241 million budgetary allocation for ‘e-Transactions Levy Services’, which essentially means that even before the much detested e-Levy sees the light of day, a shady, most certainly nepotistic, entity has been tapped to bag a cool $40 million per anum out of the blood and sweat of the overburdened people of Ghana.
“While John Kumah purports to dispel the revelation, he, in fact, confirms everything that myself and Samuel Okudzeto Ablakwa put out on the matter-which is that, that amount of money will be given to the entity that collects the e-Levy. In another breath, Frank Annor Dompreh, Majority Chief Whip, also insists that it is GRA that will do the collection and would bring in a third party only if necessary. I provide you with screenshots of both responses for your own perusal. Meanwhile, GRA collects $ 2 billion in VAT every year without any fuss or dubious payments.”
Earlier, Nsawam Adoagyiri Member of Parliament, Frank Annoh-Dompre accused his colleague lawmaker for North Tongu, Samuel Okudzeto Ablakwa, of dishonesty regarding the latter’s assessment of the E-levy proposal in the 2022 budget statement.
Mr Ablakwa had described the e-levy as e-robbery. He has called for a united front to reject the proposal.
“This is how humongous the e-transaction levy services is. We must unite and foil this e-Robbery!” he tweeted on Sunday, December 5.
But Annoh-Dompreh said Ablakwa’s comments smacked of dishonesty.
“It is dishonest to conclude that indicative costs for services shows wrongdoing. Obviously, GRA, which will take the lead with the revenue collection, is no one’s personal company.
“If it becomes necessary to include a third party, transparent procurement processes will apply,” he also tweeted.
“Again, the fact that you conveniently ignored allocations for YouStart, Agenda 111 & GhanaCARES shows the intended mischief of these baseless allegations. I suggest you confer with your leaders in Parliament and provide an evidence based critique rather than these speculations.”
Finance Minister, Ken Ofori-Atta, announced a new levy to be charged by government in 2022 on all electronic transactions to widen the tax net and rope in the informal sector. But this levy has been rejected by the opposition National Democratic Congress (NDC).
“It is becoming clear there exists enormous potential to increase tax revenues by bringing into the tax bracket, transactions that could be best defined as being undertaken in the ‘informal economy’,” Mr Ofori-Atta observed on Wednesday, November 17 as he presented the 2022 budget statement in Parliament.
“After considerable deliberations, 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’.”
He explained that the new E-levy will be a 1.75 per cent charge on all electronic transactions covering mobile money payments, bank transfers, merchant payments and inward remittances to be borne by the sender except inward remittances, which will be borne by the recipient.
This will, however, not affect transactions that add up to GH¢100 pr less per day.
“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 new levy is scheduled to start Saturday, January 1, 2022.
In 2020, total value of transactions was estimated to be over GH¢500 million with mobile money subscribers and users growing by 16 percent in 2019.
According to a Bank of Ghana report, Ghana saw an increase of over 120 percent in the value of digital transactions between February 2020 and February 2021 compared to 44 percent for the period February 2019 to February 2020 due to the convenience they offer.
This was definitely heightened by the advent of COVID-19 especially during the lockdown.