Professor Godfred Bokpin, a Professor of Finance at the University of Ghana Business School, has stated that successive governments will suffer the consequences if the Nana Addo-led government goes on with its intention of collateralizing the electronic transactions levy (E-Levy).
Professor Bokpin indicated that should this happen, future governments may not be able to scrap the E-levy if the government finally collateralizes it. He noted that collateralization of the levy to borrow more funds would mean that future governments may have to deal with a judgment debt situation, especially if loan agreements extend beyond the term of the incumbent government.
“Excessive revenue collateralization or monetization would create problems for future governments and that is not the way to go. If our predecessors had collateralized all our revenues, what would this government use to implement their vision?”
Professor Godfred Bokpin
The Economist advised the government saying “the expected revenue from the E-Levy should be used to support the government on an annual basis for easy planning and budgeting.”
Professor Bokpin, meanwhile, chastised the government for collateralizing some funds in the past and misusing the money. He iterated that the government is trying to collateralize our gold in the Agyapa deal.
“That is what they want to do with AGYAPA, they have done that with GETFUND and ESLA too and that is why this government is struggling. The sad thing is that we will go for this loan, and we wouldn’t be able to use it for anything on the ground. It will be corruption all over the place. If the goal is to manage our debt, why do you take fresh debt against this? What is the motive?”
Professor Godfred Bokpin
Government Must Be Accountable and Transparent
The Economist called for transparency and accountability on the part of the government, especially when Ghanaians are experiencing economic hardships.
Meanwhile, at a recent press briefing, the Minister of Finance, Ken Ofori-Atta, stated that government would not give an assurance that the E-Levy would not be collateralized based on the state of the economy and the financial instruments at the disposal of the government.
“I will not give you an assurance and I will at each point in time examine what we have and will make a decision with cabinet as to how best to use the resources of our country.”
Ken Ofori-Atta
John Dramani Mahama, the 2020 Presidential Candidate of the National Democratic Congress (NDC), at a public lecture recently on the theme: “Ghana at Crossroad,” indicated that the NDC would repeal the Electronic Transactions Act, describing it as a “regressive tax,” which imposes hardships on Ghanaians.
“A new National Democratic Congress government, God willing and with the votes of the sovereign people of Ghana in 2025, will repeal the E-Levy Act.”
John Dramani Mahama
The e-levy was introduced by the government in its 2022 budget. The Ghana Revenue Authority started the full implementation of the e-levy on 1st May, 2022. It has generated a lot of discussion since its implementation.
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