Reduce e-levy rate to encourage adoption – Panellists
Some panel members on the Pre-Budget Forum organised by Joy Business have called for a massive reduction in the rate of the Electronic Transaction Levy (E-levy) to encourage Ghanaians to embrace the tax.
The E-Levy, which was introduced in the 2022 Budget has performed poorly, raking in just about 10 per cent of the expected revenue three months after its implementation.
The levy, which was originally pegged at 1.75 per cent was reduced to 1.5 percent after public agitations against the policy.
Sharing his expectations, the Director of the Institute of Statistical, Social and Economic Research (ISSER), of the University of Ghana, Prof.Peter Quartey, advised government to use the 2023 Budget as a big opportunity to correct the policy by reducing the rate significantly to encourage the public to pay the tax.
He maintained that the budget gives government a unique chance to rebuild confidence in Ghanaians, by listening to the public through a reduction in the e-levy.
“E-levy can be made better. It can be made more efficient. Let us reduce the rate to 0.5 per cent and I am sure we can raise a lot of revenue,” he said.
Giving some more recommendations, Prof. Quartey stated that government can improve tax collection by bringing back road toll to improve revenue mobilisation.
He pointed out that road toll is one of the most effective ways to collect and account for taxes.
“I think that we can properly digitise road tolls through public-private partnership to make the collection of taxes effective. I think government must consider bringing the road tolls back,” he said.
On his part, the President of the Association of Ghana Industries (AGI), Dr Humphrey Ayim-Darke, also called for a reduction of the E-levy to cushion the operations of businesses.
He stated that the levy in its current state imposes extra burden on businesses, already struggling with the current economic conditions in the country.
“The E-levy must be reduced”, he said, explaining that businesses and consumers will always find legal means to avoid taxes if it increases their economic hardship.
“We think one place that can be improved is the VAT system. We must block the loopholes in our VAT system and not introduce new taxes like e-levy that is not working,” he said.
DrAyim-Darke also called on the Finance Minister to reduce taxes on raw materials for industry.
He stated that such a policy will strengthen the operations of local industries to be globally competitive. –
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