Finance Minister Ken Ofori-Atta has said the government is determined to enhance domestic revenue mobilization hence the introduction of the e-levy.
He explained that the essence of our proposal on the E-Levy is to widen the tax net and generate the required revenue to support entrepreneurship, youth employment, build our infrastructure (especially roads) and reduce our debt.
Speaking at a press conference in Accra on Monday, December 6, he said “Permit me to emphasize that the E-Levy represents our greatest opportunity to, in the medium term, broaden the tax base and meet the Tax to GDP ratio of 20% as pertains among our peers.
“To lessen the impact of the E-Levy on consumers and subscribers, especially the more vulnerable, we shall work with all the stakeholders including the TELCO’s to ensure that the all-inclusive cost is reduced by 0.25 percentage point. We shall also ensure that administration measures will be taken to avoid attempts at evading the E-Levy taxes.
“The proposed E-Levy is largely progressive. We have intentionally, set the GH¢100 threshold (covering about 40 percent of momo users), mindful of the need to exempt vulnerable groups, while continuing to encourage the development of our nascent digital economy. This, to a very large extent, will ensure that a significant number of Ghanaians, low-income earners in the informal sector, whose daily transactions fall below the GH¢100 threshold are totally exempt from the payment of the E-Levy. There are
other issues that have been raised by the Minority Causus and concerned citizens such as increasing fuel prices, poor infrastructure (estimated at about USD 522 billion over the next 10 years), insufficient job creation.
“The provision of the threshold demonstrates a caring government, the actions of a government that has, since 2017, implemented some of the most innovative social interventions that this nation has ever seen. As you can see from the Budget, various measures have been outlined.
“We will continue to remain people-centred in our transformation agenda. Through the E-Levy and other revenue/financing sources, we will Establish the unprecedented GHS10 billion YouStart programme, our vehicle to remove the fundamental impediment to the growth of enterprises in Ghana – “Access to Credit”.
“We will also address the provision of the requisite skills for our young people to confidently start, manage and expand their own businesses, while expanding the private sector to create more jobs;
“Significantly overhaul the digital infrastructure on which the transactions occur. This is to increase the assurance and protection as
well as security within this cyberspace; aggressively expand the digitalization agenda to bring more convenience to Ghanaians.
Efforts to improve the delivery of health by digitising records, supporting platforms for e-pharmacy, and improving birth certificate issuance to newborns will be sustained with funding from this levy; and to expand road infrastructure. We are currently working with the Ministry of Roads and Highways to finalise all the roads to be supported by the E-Levy. We expect to publish this list by the end of this Year.
“Fellow Ghanaians, putting a levy on electronic transfer is undoubtedly a new and innovative way of raising revenue that leapfrogs the lack of the typical infrastructure that is required to collect taxes via traditional means.
“This approach capitalizes on the new digital age that we find ourselves in today and the advent of e-money and proliferation of online transactions. Most of us today are just as comfortable ordering food online or clothes from a virtual shop as we are walking into a shop or a restaurant. We need to review our approach to tax collection to reflect this new reality.”
Regarding the proposal, he said the proposal has not changed from 1.75 %. He said it is still at 1.75 per cent.
“On the matter of the E-levy, having regard to its serious fiscal implications, we will continue our consultations with the Minority Caucus in Parliament and other relevant stakeholders, with a view to achieving consensus and reverting to the House in the shortest possible time,” he said.
This is contrary to what the Deputy Majority Leader in Parliament Alexander Afenyo Markin had said earlier to the effect that the levy had reduced to 1.5 per cent.
“For nothing at all when it comes to the bill, we know that government has shifted from 1.75 to 1.5,” the Effutu Lawmaker said on Accra-based Joy FM.
He further announced some chnages in the budget statement.
He said “with regards to Agyapa Royalties Ltd, we shall amend paragraphs 442 and 443 to take out references to mineral royalties collateralisation. It is important to note that, any reference to Agyapa was for informational purposes, and as such was not reflected in the fiscal framework;
“In respect of the unfortunate tidal waves which rendered about 3,000 people homeless in Keta, we shall make the necessary budgetary allocations of at least GHS10 million to complete the Feasibility and Engineering studies for the coastal communities adversely affected.
“We will broaden the scope of the study to consider a more comprehensive solution to protect Ghana’s 540 Km of coastline,
including the 149 Km between Aflao and Prampram. Meanwhile, NADMO has responded to the humanitarian crisis created by the tidal waves on the Keta coastline;
“Relating to the Aker Energy transaction, we shall amend paragraph 829 of the 2022 Budget on the acquisition of a stake from Aker Energy and AGM Petroleum by GNPC, to reflect the resolution of Parliament dated 6th July, 2021 that “the terms and conditions of the loan for the acquisition of the shares shall be brought to Parliament for consideration pursuant to article 181 of the Constitution; and
“On the benchmark values, we shall avert any hardships to importers and consumers while safeguarding the interest of local manufacturing industries to secure and expand jobs for our people. This administrative exercise which reviewed 43 out of 81 line items, has the objective to promote local manufacturing and the 1D1F policy, including the assembling of vehicles. It is important to note that this adjustment affects only 11.4% of the total CIF value, of which 50% is for vehicles. From our analysis, the potential increase in retail prices should be relatively insignificant and therefore inflation should be muted.
“The YouStart policy will also support our accomplished Traders with appropriate training and access to capital to become Manufacturers in order to expand the industrial base of our society and our import substitution strategy, in line with our Ghana Beyond Aid agenda.
“We will work with the relevant Committees of Parliament to reflect these modifications in the 2022 Budget as is the usual practice, before the Appropriation Bill is passed. Any other concerns which may emerge shall be addressed during the discussions of the estimates by the Committees, as has been the tradition.
“On the matter of the E-levy, having regard to its serious fiscal implications, we will continue our consultations with the Minority Caucus in Parliament and other relevant stakeholders, with a view to achieving consensus and reverting to the House in the shortest possible time.”
The Minority ad rejected the levy. In their view, the proposal will worsen the plight of Ghanaians.
Asawase Member of Parliament, Muntaka Mubarak in a statement on Friday December 3 said ” The NDC Caucus in Parliament wishes to assure Ghanaians that it will continue to use every legitimate and lawful channel to resist the 1.75% E-Levy government is seeking to impose on the ordinary Ghanaian.
“For the avoidance of doubt, the position of the NDC Caucus in Parliament right from the outset of the 2022 Budget debate has been that the 1.75% E-Levy government is seeking to impose is regressive, punitive and draconian, and that same must be suspended.
“The Minority Caucus has vigorously championed this position in Parliament and in the media space to draw Government’s attention to our demands. Subsequent to our rejection of the Budget on 26th November, 2021, government has sought to engage the NDC Caucus in a series of discussions towards finding an amicable solution to the impasse.
“Surprisingly despite the good faith demonstrated by the NDC team recognising the importance of the Budget to the economy, business and households, the government side out-rightly rejected our proposal for a revision of the E-levy leading to a breakdown of the discussions.
“We wish to state unequivocally that no concrete decision or agreement has been reached between government and the NDC Caucus in Parliament on this matter.
“As we speak, government’s so-called concessions are unknown to us and we have no clear indication that they intend to seriously consider any of the proposals that have come up.
“Under the circumstance we wish to state that the NDC Caucus will maintain its original position as stated earlier.”