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Sunday, January 23, 2022

‘Let’s Embrace E-Levy For Faster Infrastructure Dev’t’

Ken Ofori-Atta

KEN OFORI-Atta, Minister of Finance, has indicated that the traditional E-Levy represents Ghana’s greatest opportunity to, in the medium term, broaden the tax base and meet the tax to GDP ratio of 20% as pertains among her peers.

In a meeting with the media Monday in Accra, the Minister also said 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 telcos 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.”

Progressive

He continued that “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 caucus and concerned citizens such as increasing fuel prices, poor infrastructure (estimated at about $522 billion over the next 10 years), insufficient job creation.”

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Infrastructure

Mr Ofori-Atta averred, “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 capitalises on the new digital age that we find ourselves in today, and the advent of e-Money and the 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.”

Agyapa

With regards to Agyapa Royalties Ltd, the Minister said “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.”

Aker Energy

Relating to the Aker Energy transaction, he noted “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.”

Review

Furthermore, he said the administrative exercise which reviewed 43 out of 81 line items protested by the Minority in Parliament, 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.”

BY Samuel Boadi

 

 

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