OccupyGhana, a pressure group, has called on government to address the “anaemic income tax system” which it believes will help relieve Ghanaians of tax burdens in relation to the e-levy.

Contained in a statement, the group revealed that any reintroduction of the E-Levy bill to Parliament must come with clear and satisfying answers to concerns raised because the e-levy will be meaningless unless it is linked with the total implementation of the country’s income tax laws. It noted that there is the need for absolute commitment to recovering “our misused monies” and complete fiscal transparency and accountability.

OccupyGhana noted that although income taxes are meant to finance development, out of an estimated eligible taxpayer population of 10 million, information available on the African Tax Administration Forum (ATAF) portal, shows that in 2020, “the total number of actual tax income payers was a measly 2.3 million”. It explained that where an estimated 75% of potential income tax payers do not pay, it is “unsustainable and a clear sign” of failed political leadership by successive governments.

“We are literally bleeding money and subsidising the lifestyles of importers. Thus, the broader picture should be how we fix the anaemic income tax system, which might go a long way to render a lot of these burdensome indirect taxes redundant”.
OccupyGhana

According to the pressure group, it has keenly followed the debate on the proposed e-levy and highlighted that if it is to be implemented, it must be subject to three strict conditions. Among other things, it stated that there must be the full implementation of income tax laws and an active roadmap that will “double the number of income tax payers yearly until all eligible tax income payers are brought within the income tax net”. It also emphasized the need for renewed commitment by government to recover all monies declared by the Auditor-General to have been misused.

“For instance, although in 2015, Parliament passed the modified tax provisions to draw the informal sector into the income tax net, Governments since then have inexplicably failed to apply the law. Our governments refuse to do the heavy lifting required to have an effective income tax system that draws in the informal sector, and repeatedly taken the easier path…”
OccupyGhana

Against this background, OccupyGhana expressed that the e-levy might simply “paper over the deep cracks”, especially where the current proposed e-levy structure itself raises concerns such as what the “daily zero-rated threshold” should be and how to deal with the multiple taxation of the same funds.

As part of its suggestions to increase tax revenue, OccupyGhana called for taxpayer education to improve voluntary tax compliance, the implementation of the Electronic Point of Sale devices to verify sales data and VAT collections, an increase in the corporate income base by passing the Tax Exemptions Bill to reduce tax exemptions, improvement in the efficiency and effectiveness of tax administration, among others.

Following this, OccupyGhana expressed that it was time for proper fiscal transparency and fiscal accountability. It indicated that after several years of fiscal inefficiencies, no government should use “Ghana’s low tax revenue-GDP ratio as justification to impose a tax like the E-Levy, without a social contract that is based on fiscal transparency and accountability”.

Thus, it noted that if the e-levy is approved by Parliament, that legislation must also require government to submit itself to a fiscally transparent and accountable regime where in every quarter of the year, Government will at the minimum, publish the revenue from the E-Levy and details of how the revenue was disbursed.