The next National Democratic Congress-led government, God willing and with the votes of the sovereign people of Ghana in 2025, will repeal the E-Levy Act, former President John Dramani Mahama said on Monday.
He said even as the Government remained fixated on taxing its way out of economic mismanagement, it had also been wasteful, saying: “They have failed to demonstrate prudence in public financial management”.
“The people of Ghana cannot be called upon to pay more taxes only for the accruing money belonging to the people to be wastefully shared among family and friends through various illegal procurement practices,” Mr Mahama stated in his presentation in Accra, dubbed “Ghana at a Crossroads”.
Touching on: ‘E-Levy and Waste of Public Funds’ he said governments, since the Fourth Republic, had invested in digital infrastructure to modernise the economy.
“In my time as President, we laid the most extensive number of kilometers of fibre optic cable and further provided 4G LTE wireless broadband in order to bring all parts of our country into the new digital revolution.”
Through those investments the NDC-led government created the opportunity for Ghanaians to enjoy the ease of electronic transactions to improve their businesses and wellbeing, he said.
Mr Mahama said mobile money payments facilitated remittances to parents in the villages, purchase of groceries in the markets and supermarkets, and payment of goods and services while electronic banking had helped the movement of money from account to another without the use of cheques or cash transfers.
Those were some positive developments for the country’s economy and represented the fastest means of shrinking the informal economy and bringing Ghanaians all into the formal one, he said.
“Unfortunately, in the face of this self-inflicted economic catastrophe, this government against all sound advice has decided to introduce the E-Levy, a regressive tax that heaps more suffering on Ghanaians,” the former President said.
“If a worker gets paid in his electronic wallet; his PAYE tax had been deducted already but for every transfer or purchase above GHS100 he makes on his e-wallet, he must pay an additional 1.5 per cent tax.”
It would now be tempting for such a person to draw cash from his e-wallet and make the payment for his groceries, fuel, entertainment, and utility bill, all with cash, he said.
“The collection of the E-Levy began yesterday and as though a slap in the face, it began on May Day. Already there is a litany of complaints about the implementation.”
“There are complaints of transfers of under GHS100 being subject to tax contrary to the law.”
Mr Mahama said the Government’s desperation to taxing Ghanaians to get the nation out of the “hell hole” it had plunged Ghanaians would not succeed because its own budget proposals showed the e-levy would not make any significant contribution to resolving the nation’s problems.
“We in the NDC do not oppose taxation as a principle. We will not be pretentious and couch fanciful slogans to condemn the principle of taxation like the New Patriotic Party did in the past,” he said.
“We are, however, implacably opposed to distortionary and burdensome taxes like the e-levy that only forces Ghanaians to endure more suffering.”
The 2020 Auditor-General’s report makes for grim reading within the context of waste and corruption in the use of public funds, which Mr Mahama said, revealed a colossal GH¢12 billion was lost to corruption and other forms of financial malpractices.
“This is twice the amount that the unpopular e-levy is supposed to accrue this year”.
He said it had also recently become known that State-Owned Enterprises (SOEs) made total losses of about GH¢5.3 billion in 2020 and up to GHc9 billion of losses was incurred by Energy Sector SOEs between 2018 and 2021.
“How can the taxpayer ever be called upon to pay more when his money is going down the drain in this manner?” He asked.