The Minority side of Ghana’s eighth Parliament has offered clarity on its demands to government with respect to the controversial 1.75 e-levy.
The NDC caucus in a statement issued on Friday, December 3, 2021 and signed by its Chief Whip Muntaka Mubarak cleared the air on its position on the proposed levy, clarifying that it wants it scrapped from the budget.
“The NDC Caucus in Parliament wishes to assure Ghanaians that it will continue to use every legitimate and lawful channel to resist the 1.75% E-Levy government is seeking to impose on the ordinary Ghanaian.
“For the avoidance of doubt, the position of the NDC Caucus in Parliament right from the outset of the 2022 Budget debate has been that the 1.75% E-Levy government is seeking to impose is regressive, punitive and draconian, and that same must be suspended.
“The Minority Caucus has vigorously championed this position in Parliament and in the media space to draw Government’s attention to our demands,” parts of the statement.
The content of the statement is a departure from a suggestion by the Minority Leader that some form of resolution has been reached on the matter after the Finance Ministry agreed to reduce the levy from the initial 1.75% to 1%.
Haruna Iddrisu is quoted to have said at an event on Thursday, December 2, 2021 that the Minority has welcomed the reduction and is ready to deliberate with government on the way forward.
“A week ago, it was no no-no, we won’t accept e-levy but having listened to officials in government, including the Minister of Finance, I am convinced to accept a departure from my original “no” to accepting a one percent e-levy,” Iddrisu said at the launch.
He noted that when the e-levy is pegged at one percent, it will be a great contribution to fiscal consolidation and would ensure the economy did not collapse going forward.
The digital economy, according to Haruna Iddrisu, was doing well and had facilitated a revolution in financial inclusion, hence it was unwise to overburden the telecommunication sector.
“We are not against it but we want it fixed at one percent. We fear for double taxation because we already have the communication services tax,” he said.
1.75% levy on electronic transactions
Ken Ofori-Atta introduced a new 1.75% levy on all electronic transactions such as Mobile money transactions, remittances and other electronic transactions.
Fees and charges of government services have also been increased by 15%.
The Finance Minister explained, “It is becoming clear there exists an enormous potential to increase tax revenues by bringing into the tax bracket, transactions that could be best defined as being undertaken in the informal economy.
“As such government is charging an applicable rate of 1.75% on all electronic transactions covering mobile money payments, bank transfers, merchant payments, and inward remittances, which shall be borne by the sender except inward remittances, which will be borne by the recipient.
“To safeguard efforts being made to enhance financial inclusion and protect the vulnerable, all transactions that add up to GH¢100 or less per day, which is approximately ¢3000 per month, will be exempted from this levy,” Ofori-Atta revealed.