Mr Kwame Jantuah, Chairman of the Association of Ghana Industries (AGI), has added his voice to the raging debate on the E-levy. he postulated that the introduction of the e-levy has the potential to collapse businesses in the private sector of the economy.
According to Mr Jantuah, the E-levy could force many Ghanaians to abandon mobile money transactions and rather save in banks. However, he explained that most of the banks prefer to do business with Government and not the private sector, because the risk of doing business is lower with the government than the private sector.
“Whether they put e-levy on it [mobile money (MoMo) transactions, inward remittances and ATM withdrawals] or they don’t, government wins.
“So, if people put their money back to the banks, government goes to the banks for loans and because the banks know that it is guaranteed that government will pay, they give the government at the expense of the private sector. What does that do to the private sector as the engine of growth? It collapses because these same banks don’t give private sector the money.”
Mr Kwame Jantuah
Though Mr Jantuah admitted that the E-levy, if managed well, could enhance socio-economic development, he emphasized that it could cripple the engine of growth of the economy [the private sector] if the concerns raised by the Minority and some financial technology (fintech) companies are not addressed.
The AGI Chairman, though, noted that the Government needed money in the form of taxes to fund its development projects, implored the government to explore other areas of raising revenue apart from the unpopular e-levy.
Mr Jantuah, who was also a former Vice Chairman of the Public Interest and Accountability Committee (PIAC), stated that, over time, the trust of Ghanaians in government’s judicious use of taxes has waned. As such, he observed that there is the need for the Government to, “convince Ghanaians that the levy will be used judiciously…, and the right way round it is for us to have a national dialogue.”
Government Burdening Ghanaians
Mr Edward Bawa, the Member of Parliament for Bongo Constituency, averred that Government is putting more burden on Ghanaians through the introduction of additional taxes.
The MP referenced the Sanitation and Pollution Levy (SPL) of 10 pesewas on the price per litre of petrol/diesel under the Energy Sector Levies Act (ESLA) and the Energy Sector Recovery Levy of 20 pesewas per litre on petrol/diesel under the ESLA, as some of the taxes that brought hardship on the tax payer.
These taxes, according to the government, were introduced in the 2021 budget as part of measures to mitigate the impact of the COVID-19 pandemic on the economy and to shore up revenue.
Dr Kabiru Mahama, an Economic Policy Analyst at the Office of the Vice President, other the other hand admitted that “governments need to be more transparent and forthcoming to explain to citizens how much they spent.”
“The Government is still of the view that we need to raise our tax revenue. The Government will continue to engage the Minority, and every stakeholder and the public and in the coming days. The Ministry of Finance will lead that process and come to a consensus as to the amount that should be reasonable for Ghanaians to be able to bear the burden with us, as we develop and continue to transform this country.”
Dr Kabiru Mahama
