Prof. Godfred Bokpin, lecturer of Finance and Economics at the University of Ghana (UG), has stated that he agrees with the position of Vice President, Dr. Mahamadu Bawumia, that the E-levy tax needs to be scrapped.
Prof. Godfred Bokpin asserted that the E- levy is inappropriate and that any government from 2025 should not hesitate to abolish it. He stated that the abolishing the E-levy will not have any adverse effect on Ghana’s tax objective under the International Monetary Fund (IMF) supported Domestic Debt Exchange Programme (DDEP).
“If the IMF had its own way, it would have asked the government to abolish the E-levy. Probably the government would have told the IMF that it should be given a little bit more time to see how the tax handle will perform before probably it is reviewed or abolished”.
Prof. Godfred Bokpin
He argued that a digital and cashless economy needs to be promoted as the digital economy is projected globally to grow faster than the traditional economy. He disclosed that tax handles such as the E-levy are inhibiting forces to a digitalized economy.
Prof. Godfred Bokpin revealed that the E-levy contradicts the aim of digital or cashless economy as it punishes people for using the most effective way of transacting business. He maintained that the practice is backward and should be abolished regardless of who becomes President after the December 2024 General Polls.
Accordingly, Prof. Bokpin asserted that the government has not been able to leverage on the successful implementation of the Ghana Card thus far. He emphasized that the country’s tax revenue should be scaled up by roping owners of the Ghana Card into the tax bracket.
“That raises question as to whether we will be able to scale up tax revenue merely on the basis that every Ghanaian has a Ghana Card. There is a lot of work that has to be done…less than 5 million people pay direct income taxes”.
Prof. Godfred Bokpin
Subsequently, Prof. Godfred Bokpin asserted that the taxes which Ghanaians are suffering are not direct income taxes but indirect (consumption based) taxes. He claimed that the more formalized the economy is the more direct income tax the government generates.
More so, Prof. Godfred Bokpin stated that due to the huge informal sector of Ghana’s economy, the country is unable to scale up on tax revenue. He therefore said that the Vice President’s vision to abolish E-levy and focus more on direct income taxes is a step in the right direction.
The Efficiency Of The Opposition
Prof. Bokpin indicated that the average Ghanaian politician is efficient in opposition. He claimed that the Vice President spoke from a place of opposition during his address at the launch of his Presidential bid. He opined that the New Patriotic Party owes Ghanaians an apology as the party represented the Ghanaians’ hope for economic transformation.
Furthermore, Prof. Godfred Bokpin stated that the Vice President’s stance on taxation and the E-levy are mostly in line with the proposed policies of most of the Presidential Candidates because the Vice President and the other Presidential Candidates are all operating from a place of opposition.
“The level of resources; tax revenue that the NPP government has had the privilege of presiding over from 2017 to 2024, no government has had that. In oil both in volume and price…the level of borrowing the government has done, no other government can do that”.
Prof Godfred Bokpin
Prof Bokpin revealed that no government of Ghana is ever going to have access to such amount of resources and the support of citizens in the future. He asserted that all Presidential Candidates are beginning to appreciate the dissatisfaction of Ghanaians concerning expenditure management by government.
Professor Bokpin made these remarks in regards to the Vice President’s recent address and the subsequent supports and criticisms it has generated from the public and notable public figures in Ghana’s political sphere. He opined that while he agrees with the Vice President on abolishment of the E-levy, he does not support the Vice President’s attempt to absolve himself of any blame in the role he played in the government.
Conclusively, the incumbent government continues to cite the Covid-19 pandemic and the Russia-Ukraine war for its poor economic performance and as justification for the numerous taxes imposed on Ghanaians. While the government seem to have run out of excuses to give Ghanaians, political critics continue to give the government a run for its money with regards to issues of economic relevance.
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