Proposed E-Levy: Withdraw, consult stakeholders- Dr. Ali-Nakyea to Government
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”.
A Tax expert and Lecturer at the University of Ghana School of Law, Dr. Ali-Nakyea has advised the Government to withdraw the proposed Tax on Electronic Transactions and consult stakeholders.
According to him, the Levy was not well-thought-through thus was proposed in haste.
Therefore Dr.Nakyea is calling on the Government to do a wider consultation of all stakeholders hence coming up with a widely accepted proposal.
“There are so many reactions to this, that tells me that this is not a policy that has been well thought through. It is not new in the sense that two years ago it started popping up. The Communication Ministry began giving signals that we want to look at that sector. I thought that we should be having a stakeholder engagement and consultation by now, and then we can fine-tune it. Just as was done with VAT, it was withdrawn after the Kumipreko demonstration, a stakeholder consultation was held after which it was relaunched. That is exactly what I think should be done in this case.”
“I think it should be withdrawn, deliberated on, and relaunched. Can we take our time to determine who is to pay the tax, which transactions should be covered, how we are going to collect it and account for it, after that we need to audit to ensure that all that has to be collected has been done? How do we go through all these? This is what a tax policy project entails. Then we will all be certain,” he noted.
In his presentation of the 2022 Budget statement to Parliament last Wednesday, the Finance Minister, Ken Ofori-Atta indicated that to widen the tax net, the Government has decided to place a levy on all electronic transactions.
“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”.
Electronic transactions covering, mobile money payments, bank transfers, merchant payments, and inward remittances will be charged at an applicable rate of 1.75 percent, which shall be borne by the sender, except inward remittances which will be borne by the recipient,” he said.
In an interview on Citi Breakfast show on November 22, 2021, he further mentioned that Tax- policymaking is a process and not an event.
“These are early days yet. For me, that has been our challenge with tax policymaking in the country. Tax-policy making is a process and not an event, so when you come out with such a policy, on the face of it is stated that there will be a 1.75% e-levy on the value. That is the simple interpretation anyone will give,” he indicated.
