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E-Levy rate reduced to 1.5%
Minority, citizens oppose E-Levy
On November 17, 2021, the Minister of Finance, Ken Ofori-Atta, appeared before the Parliament of Ghana, per Article 179 of the 1992 Constitution and Section 21 (3) of the Public Financial Management Act, 2016, (Act 921), to present the 2022 Budget Statement and Economic Policy.
Of all the new policies introduced in the Agyenkwa Budget, as that budget was themed, was the controversial 1.75% Electronic Transactions Levy, commonly known as the E-Levy.
Since then, the E-Levy has gone through what has become an equal split of controversial rejections and approval by parliament after it was admitted to the House, but the dust on the matter is yet to settle properly.
The Minority Members of Parliament have already registered their outright disinterest in the levy, stating countlessly that they will not approve it. They are backed by the numbers they hold in the House- 137 apiece- with their colleagues on the other side.
However, the only independent MP in the House, Andrew Asiamah, the Second Deputy Speaker of Parliament, has elected to vote with the Majority side, giving them a little urge over the Minority. But it still remains a murky situation.
Being a Speaker of Parliament-in-waiting, Andrew Asiamah might at a point or another be in the seat, steering proceedings, and that might deny him some privileges such as voting rights on bills.
And even if that doesn’t play out with the Fomena MP, his immediate boss, the First Deputy Speaker of Parliament, Joseph Osei Owusu, is the one most likely to be in such a situation, especially in the absence of Alban Bagbin.
The legalities or otherwise on voting while in the seat of the Speaker of Parliament have also been discussed extensively, but that remains a subject for another day or forum.
But even more interesting have been the several things that some members of the government, including MPs on the New Patriotic Party (NPP) side, have said about the E-Levy’s approval and what could happen should it not be given the nod they seek.
In this GhanaWeb listicle, we bring you all of those reasons or justifications that have been propounded around the now 1.5% E-Levy.
Ursula Owusu-Ekuful:
Speaking on GH Today on GHOne TV on November 18, 2021, the Minister of Communication and Digitalisation explained that anyone who has more than GH¢100 on them in a day for transactions should thereby not be considered poor and should pay taxes on their digital transactions.
“We have made it a part of this policy that up to a GH¢100 a day per person is exempt. This, the state is saying, if you’re sending up to a GH¢100 a day, cumulatively, you can send up to GH¢3000 a month, that is all going to be tax-free.
“Now, if you have more than a GH¢100 to send a day, then you’re not poor. So, if you really are poor and you are in a position to send GH¢100 a day, then we need to re-classify the definition of who the real beneficiaries of these are, and it is only the sender who pays, not the receiver,” she clarified.
At a later date, during a Townhall Meeting on the E-Levy, at Koforidua, she passed another comment that courted a lot of public conversations.
“In 2008, the government of President Kufuor introduced the Communications Service Tax in August of that year, and it became another source of income for national development. That tax was introduced at a rate of 6%, which was later increased to 9%.
“E-Levy is being introduced at the lowest rate for any tax in Ghana, comparatively at 1.75%. Less than 2%. In other countries, digital taxes are being introduced at the rate of up to 10% and they’re paying. That’s the UK,” she said.
A GhanaWeb FactCheck actually proved that she lied that the UK’s digital tax was pegged at 2% and it was also directed at digital corporations and not at an individual as is the case with Ghana.
But the minister insists that her comments needed to be analysed in context.
The Minister of Finance, Ken Ofori-Atta, has cautioned of dire economic consequences if the proposed Electronic Transaction Levy Bill is not approved.
According to him, Ghana’s economy could potentially end up in a disaster if lawmakers and citizens fail to support the tax measure.
Addressing participants at a Town Hall meeting on Thursday, January 28, Ken Ofori-Atta underscored the importance of the bill being approved in order not to erode the economic gains made by the government.
“If we don’t do this E-levy, we are just pushing ourselves in a way that would potentially end up in such a disaster. There was a warning of that because last week was a very difficult week for the country,” he said.
He cited that the recent downgrade of Ghana’s economy by rating agency- Fitch- is a precursor of what may happen to the economy if the E-Levy Bill is not passed.
“Last week, we got downgraded by Fitch because they do not believe we could raise the revenues that we had forecasted because we were fighting about E-levy…so we need to moderate that because the consequences are quick,” he said.
Stephen Amoah:
The Member of Parliament (MP) for Nhyiaeso, Dr. Stephen Amoah, said that the governing New Patriotic Party MPs will ensure that the E-Levy bill is passed at the right time.
According to him, the implementation of the E-Levy will help transform the lives of Ghanaians.
“We will pass it, we, we will pass it at the right time, they can’t do anything. We are in government. If they claim they want to make us unpopular, why won’t they stop? Because they know this is going to transform and change the lives of Ghanaians.
“They know this is going to reverse the consequences of the COVID-19, they know this is going to put our fiscal space in the right perspective, and they are afraid that Ghanaians will continue to build their goodwill and confidence in this government,” he stated.
Osei Kyei-Mensah-Bonsu
The Majority Leader in Parliament, who is also the Minister of Parliamentary Affairs, Osei Kyei-Mensah-Bonsu, also said if Ghanaians want to see a collapse in the country’s economy, then they should go ahead and reject the introduction of E-Levy.
According to him, the E-Levy will revitalize the economy, hence, the need for it to be introduced.
“Mr Speaker, the minority leader is adding that they have taken a position that they want to stand with the public to reject the E-Levy. Mr Speaker, we on this side want to stand with the republic to ensure the revitalization of the economy; if the people want to see the collapse of the economy, so be it for them,” he said.
President Nana Addo Dankwa Akufo-Addo
As the Number One man in the country, and in whose biggest interest the E-Levy will be since he sanctioned it, President Nana Akufo-Addo gave reasons on why this is a necessary path to take.
Concluding with a statement that shows how far he and his government will go to ensure the controversial levy is passed, the president stated that its passage would allow it to make up for several expenses that were made in recent past years due to the novel Coronavirus.
“Revenues during 2020/2021 went down considerably because of the slowing down of the economic activities that came from the COVID-19. At the same time, government, in order to keep the country going, did incur some expenditures on the free water, the free electricity.
“These were the unavoidable expenses that the government had to make. These are the efforts that we are now making, which are being resisted by the opposition, but we will try and close the gap. That is the reason it has become necessary for us to use these measures like this famous tax which has caused so much unnecessary disputation; nevertheless, we would continue,” he said.
Kusi Boafo
The Chief Executive Officer of Public Sector Reforms Secretariat, Thomas Kusi Boafo, served a warning to Ghanaians to accept the controversial E-Levy or risk going jobless.
According to him, Ghanaians risk losing the Free Senior High School education policy if they refuse to accept the E-Levy.
He said accepting the levy is the easiest way out in order to avoid economic turmoil in the country.
“So, Ghanaians must make a choice; we don’t like free education, stop employing our children, don’t increase wages and salary, Kusi-Boafo trigger the sacking of workers…and I’ll do so, and there will be no E-Levy for anybody.
“There will be no road for you; schools will not be built, there will be no payment of tier two for workers…
“Ghanaians want the government to do all these things and as a listening government…it is on the government to help especially people of Apiate so that God will bless us. This is the time we must demonstrate that we are redeeming the country,” Kusi-Boafo explained in Twi.
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