Professor Godfred Bokpin, the Dean of Students at the University of Ghana, has slammed the government for imposing the Electronic-levy, calling for the removal of the e-levy with immediate effect.
Per the lecturer, the finance minister’s Levy (E-Levy) will exacerbate the sufferings of the poor and disadvantaged in society.
“We have a long way to go. Government should just abolish it [E-Levy] before they even start implementing it. You don’t do this at this stage of the digitization, you don’t. You see the reason why we have adopted it, and is a lazy way of raising revenue… it requires less efforts.
“And because the existing tax compliance that requires to work, going out there coupled with integrity and ethical values, we have failed. We are adopting this indirect way that imposes greater costs on the poor and the marginalized and the socially excluded to fill up the revenue gap.”
Professor Bokpin
Bridge the Income inequality in the country
Professor Bokpin contended that, given the country’s existing income and wealth inequality, the government should pursue a progressive tax policy rather than the one it is currently pursuing. He noted that burdening the economy with more taxes demonstrates how desperate the government is to raise revenue. He thus urged the government to bring policies that would narrow the growing inequalities in the country.
“You see, the inequality enhancing effect of these tax handles are high. Already, Ghana’s inequality is above the minimum threshold by the International Monetary Fund, by which inequality tends to negatively influence growth. We are in excess of 40%.
“Now one of the ways that government can use to sustainably address inequality is fiscal policy, from the perspective of tax. You want to make your tax structure progressive and, in that way, you are able to contribute to narrow the inequality, but that is not what we are doing.”
Professor Bokpin
Finance minister introduces E-Levy
The government has established an Electronic Transaction Levy as part of its efforts to broaden the country’s tax base and to increase revenue to finance developmental projects.
Every electronic transaction will be subject to a 1.75 percent fee. According to Finance Minister, Ken Ofori-Atta, the purpose of this tax is to increase financial inclusion and safeguard the underprivileged.
The fee will be placed on transactions involving mobile money, bank transfers, merchant payments, and inward remittances, and will be incurred by the sender.
“After considerable deliberations, the government has decided to place a levy on all electronic transactions to widen the tax net and rope in the informal sector. This shall be known as the Electronic Transaction Levy or E-Levy.”
Finance minister
Nevertheless, the charge will not be applicable for transactions totaling less than GHS 100 per day or GHS 3,000 per month.
Parts of the levy’s money will be utilized to assist entrepreneurship, youth employment, cybersecurity, digital, and road infrastructure, among other things, according to the government.
If the appropriation is passed, the government anticipates that the new policy will go into effect on January 1, 2022.
“Government will work with all industry partners to ensure that their systems and payment platforms are configured to implement the policy.”
finance minister
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