2022 budget hailed, new E-Levy and toll levy cancellation condemned

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Close-up of a Calculator and Pen on a Financial Newspaper. Blue-toned.

Dr Alex Ampaabeng, Fiscal Policy Specialist, Oxfam Ghana, has applauded the government for introducing key social and economic policies in the 2022 economic policy statement.

He however condemned the introduction of E-levy and cancellation of toll levy.

He said the introduction of revenue mobilisation strategies to shore up government revenue was commendable and seemed to hold great prospects for turning around Ghana’s economy.

However, he warned that the introduction of the Electronic Transaction Levy (E-levy) could have dire consequences on the government’s efforts to digitalise the economy for efficient service delivery, especially considering the impact of COVID-19 on the economy.

Dr Ampaabeng was speaking in an interview with the Ghana News Agency on the 2022 budget statement and economic policy of the government delivered to parliament on 17th November 2021 by Finance Minister Ken Ofori-Atta.

He applauded the government for introducing key policies in the revenue mobilisation stream through the Ghana Revenue Authority that would from January 2022 assist the Metropolitan, Municipal and District Assemblies (MMDAs), to implement a common platform for property rate administration to enhance property rate collection.

It would also bolster the extension of Value Added Tax (VAT), relief for two years on African print for manufacturers, digitising every aspect of revenue collection and introducing a tax exemption bill that is ready to be passed.

He explained that digitising revenue collection would go a long way to closing all loopholes in the revenue chain. “The more transactions we carried out online, the better and the chances of closing the leakages.”

He said 1.75 per cent E-levy would compel people, particularly traders to pay goods and services with cash rather than engaging in bank transfers and mobile money transactions.

He projected this would promote a cash economy rather than the cashless economy that Ghana was championing to improve service efficiency and effectiveness.

He said the government best alternative was to tax charges of mobile money operators and take part of the existing one per cent, telecom operators do charge on customers.

“If a sender on the same money is tasked over and over again, it would create multiple layers of charges on the same transaction and this would not help the digitisation agenda,” he said.

Meanwhile, mobile money subscribers in the Asene Manso Akroso District have called for a downward review of the 1.75 per cent electronic transaction levy.

Though the introduction of mobile money reduced travelling expenses of remitting money to relatives, the subscribers said government’s decision to impose a 1.75 per cent levy on the transactions was on the high side.

Mobile money subscriber, Mr Kojo Arthur, said the cost of travelling with cash was high, but the high percentage of the levy would discourage many people from patronising mobile money, and push people in the informal sector to engage in underhand dealings and black marketing.

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