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Business News of Thursday, 18 November 2021

Source: www.ghanaweb.com

Decision to introduce e-levy 'a lazy measure to generate revenue' – Prof. Bokpin

Dean of Students at the University of Ghana, Professor Godfred Bokpin Dean of Students at the University of Ghana, Professor Godfred Bokpin

A 1.75% electronic transaction levy has been introduced

Prof. Bokpin believes the measure is counterproductive

Ken Ofori-Atta has delivered the 2022 budget statement


Economics Professor at the University of Ghana, Godfred Bokpin has described government’s introduction of the Electronic Transaction Levy (E-Levy) as a lazy approach to generating revenue.

Delivering the 2022 Budget Statement before Parliament, Finance Ken Ofori-Atta announced to lawmakers, the e-levy charge which will be slapped on digital transactions covering Mobile Money, bank transfers and others.

Reacting to the development on the Joy FM Super Morning Show, Prof. Bokpin believes that the introduction of the e-levy will worsen the plight of the poor and vulnerable Ghanaian.

“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 digitisation, you don’t. You see the reason why we have adopted it, and is a lazy way of raising revenue….it requires less efforts.”

“Because if you look at the existing tax handles, the inefficiency and the low productivity in the existing tax handles is a true reflection of our attitude to hard work. It is a true reflection of our low compliance level that our laws are observed more in breach than in compliance.”

He continued, “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 marginalised and the socially excluded to fill up the revenue gap.”

Professor Bokpin further explained that Ghana's inequality levels at the present require government to adopt rather progressive ways to generate tax.

“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.” he pointed out.

Meanwhile, the Electronic Transaction levy will be waived for transactions that amount to GH¢100 or less in a day or approximately GH¢3,000 per month.

The implementation of the new levy is expected to take effect from January 1, 2021 once the appropriation of the 2022 Budget Statement is passed by Parliament.