Businesses in Ghana especially those that use electronic mediums to transact businesses have raised concerns about how E-levy may affect their operations.
They claim the proposed electronic levy will raise their operation cost, making it difficult to stay in business in this post-covid-19 era.
Mr. Arnold Parker, Managing Director of AFB Ghana (operators of Qwikloan services) on MTN, is one of those complainants. He stated that if the government goes ahead with its intentions to apply the electronic levy, Qwikloan will cease to operate within a year.
Mr. Arnold Parker intimated that Qwikloan is the most used financial product in Ghana and has saved millions of lives in the country. He claimed that incorporating the digital levy proposed by the finance minister into its financial statements will collapse the business. As a result, he urged the government to scrap the program in favor of finding a more beneficial tax plan.
“Four years ago today, together with our partners MTN and Jump, we launched what has arguably become Ghana’s most utilized financial product -Quick loan. In the 4 years that Qwikloan has been in existence, we have disbursed over Ghc7billion to well over 4.2 million people. Interesting that the Qwikloan anniversary comes at a time when heated discussion on the e-Levy rages on.
“If I plug in the proposed e-Levy rate into our financials, Qwikloan would cease to exist within a year. Yet it is a product like Qwikloan, which has been a lifesaver for millions in their times of need, that has the potential to transform this economy”.
Arnold Parker
The Managing Director proposed, in an earlier submission, that the government should look for alternative revenue sources other than the e-levy. He stated that Ghana’s economy has enormous potential that has yet to be realized; as a result, he urged the government to center its focus on tapping the economy’s full potential.
“Let’s turn our attention to building our economy now. A country that’s supposed to have a GDP of $600 billion should not be ok when its GDP is $60 billion. For many decades now, we have operated way below our potential and robbed millions of our kith and Skin a decent life. The free things we promise the people, the more businesses we must allow to flourish to find the freebies. It is time to build and grow Ghanaian businesses.”
Arnorld Parker
E-Levy May Impede Economic Recovery
Furthermore, given how negatively Covid-19 has impacted Ghana, a large number of Ghanaians have questioned the e-levy’s effectiveness in this post-covid-19 era. Some have suggested that the e-levy will hamper economic recovery.
Speaking at a lecture dubbed “Ghanaian Dream: Transforming the Economy through the Creation of Jobs and Opportunities for All”, Dr. Kwabena Duffour, a former Governor of the Bank of Ghana, characterized the e-levy as “problematic” and argued that if it is authorized, it will constitute double taxation.
“It should be noted that taxes/levies are imposed on income, gifts, consumption and held properties or assets. Electronic transfers and payments are none of these. This makes the proposed E-levy problematic because it could be fraught with serious implementation challenges. This tax could undermine the Ghanaian Digital Economy.”
Dr. Duffour
The banking expert mentioned that the e-levy will thwart the strides being made in our digitization spectrum and possibly cancel the digital economy the government of Ghana is championing.
“This tax could undermine the Ghanaian Digital Economy. This is because taxing modes of payment could lead to instantaneous double taxation since the underlying income, and commodity would have normally been taxed already.”
Dr. Duffour
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