Accra, Ghana//-The Minority in Parliament have said they stand collectively united against government’s decision to tax electronic transactions.
Minority Leader Haruna Iddrisu, who communicated his side’s position to government, said the e-levy proposal will further marginalize the poor, defeat financial inclusion.
He added that the levy possesses all the elements of double taxation “and even the projection, 1.75% may as well work out to be 3.75%.”
The Finance Minister Ken Ofori-Atta, at the presentation of the 2022 budget and economic policy, hinted at government’s plan to introduce an e-levy to increase tax revenues.
He noted that “the government will charge 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.”
But addressing a post budget workshop for Members of Parliament in the Volta regional capital Ho, the Minority Leader said his side cannot build consensus on the tax, saying they remain unconvinced about the justification for the tax.
“Mr Speaker, our concern is whether the e-levy itself is not and would not be a disincentive to the growth of a digital economy in our country; and we are convinced that the e-levy may be as well be a disincentive to investment and a disincentive to private sector development in our country.”
“We in the Minority may not and will not support government with the introduction of that particular e-levy. We are unable to build national consensus on that particular matter,” he revealed.
Contrary to fears from a section of the general public, the Finance Minister has said the essence of the 1.75% E-levy is to provide government with the necessary wherewithal to support local entrepreneurs.
Mr. Ofori-Atta maintained in an interview on Thursday, November 18 that taxes are inevitable, and therefore the E-levy is one of such taxes designed to cushion the strides of entrepreneurs; thus rubbishing suggestions that the new policy will cripple businesses.
The Minority, however, hold the firm view that the implementation of that levy will cripple businesses.
“If you were remitting just GH¢1 million as a business person, what we do know is that government taxes income and revenue and not capital; so if you were sitting somewhere in Tamale or in Suame, and you are buying parts in Abossey Okai and you just transferred GH¢1 million, you’d lose GH¢17,000 of that money.”
“That is a tax on capital, not on revenue and not on income and therefore, we have no hesitation serving you notice that we will not be convinced as to the justification of this particular tax measure.”