UK’s DST Vs Ghana’s E-Levy: Ursula’s Flawed Theory Of ‘Up To 10%’
This matter should have easily gone to bed without any further skirmishes but the Minister of Communications and Digitalisation, Ursula Owusu-Ekuful, might just not have gotten the memo.
It was on Thursday, January 27, 2022, during the government’s Townhall Meeting on the Electronic Transactions Levy (E-Levy), at Koforidua in the Eastern Region, that the conversations on what could just be a newly propounded theory of ‘up to 10%’ was incubated.
Addressing the meeting, the minister presented a defense on behalf of her employers (the government), turning all ears to perhaps what has not become the biggest outcome of that Townhall Meeting.
"E-levy is being introduced at the lowest rate for any tax in Ghana, comparatively at 1.75%. Less than 2%. In other countries, digital taxes are being introduced at the rate of up to 10%, and they're paying. That's the UK," she told the gathering.
And then curiosity took over that particular statement of hers, getting factcheckers almost immediately busy.
GhanaWeb FactCheck: Ursula Owusu's false claim on UK Digital Service Tax rate
In that address, Ursula Owusu-Ekuful did not exactly state the tax from the UK that she compared with Ghana's 1.75% E-Levy, but the GhanaWeb FactCheck desk did a quick check online to ascertain whether or not any such similar tax exists in the UK.
According to gov.uk, from April 1 2020, the government introduced a new 2% tax on the revenues of search engines, social media services and online marketplaces which derive value from UK users.
By this tax, businesses would be liable to the Digital Services Tax when their worldwide revenues from these digital activities are more than £500 million and more than £25 million of these revenues are derived from UK users.
Additionally, the DST will ensure that there was an allowance of £25 million, which means a company's first £25 million of revenues derived from UK users will not be subject to Digital Services Tax.
The GhanaWeb FactCheck desk concluded that the minister lied.
E-Levy: Ghana is not Uganda or UK – Ursula defends her 10% UK digital tax comments
When the dust was just settling on these findings, which was equally researched by a number of other credible factchecking platforms in the country, the Minister of Communication returned with what many have deemed as a poor attempt of justification.
In a Facebook post, she wrote:
“Ghana is not Uganda or UK so please let’s chart our own course, learning from best practices and modifying it to suit our own purposes.
“´….Up to 10%´ means anything between 0-10%. It does not mean 10%. The UK’s 2% DST falls within this range. So who is lying or ignorant ?????
“Will the fact checkers, commentators and hangers on be gracious enough to admit that they got it wrong AGAIN ?? I doubt it so not holding my breadth,” portions of her post said.
MFWA boss calls Ursula's UK tax defense a 'mind-boggling logic of semantics’
The Executive Director of the Media Foundation for West Africa, Sulemana Braimah, reacted to Ursula’s comments.
In a tweet, he described her comments as a “mind-boggling logic of semantics.”
“Ursula Owusu claimed that some countries such as the UK are charging up to 10% digital tax. When @factcheck_ghana exposed her claim as completely false, guess what she says? That when she said "up to 10%" she meant from 0% to 10%. So, if UK tax on companies is 2%, she was not wrong,” he wrote.
The Ursula theory of ‘up to 10%’
In a follow-up post by Sulemana Braimah, he questioned the logic behind the defense by the Minister of Communications, Ursula Owusu-Ekuful, on her use of words in describing what she meant when she compared the E-Levy to the United Kingdom’s Digital Services Tax (DST).
He explained that if that analogy should be right, then the 1.75% E-Levy being introduced by the Nana Addo Dankwa Akufo-Addo government could also easily pass for the ‘up to 10%’ argument.
“According to our Minister of Communications, @UrsulaOw it will be correct to say that Ghana's proposed E-Levy is up to 10% since 1.75% is within the range of 0% to 10%. What a mind-boggling logic of semantics,” he wrote.
E-Levy reduced to 1.5%
In the meantime, the Minister of Finance, Ken Ofori-Atta, has announced that after consultations between all the major stakeholders, the government has decided to reduce the proposed 1.75% E-Levy to 1.5%.
The Minority Members of Parliament also oppose the new 1.5% rate for the E-Levy, insisting that the only thing they will agree to is a complete scrapping of the levy.
According our Minister of Communications, @UrsulaOw it will be correct to say that Ghana's proposed E-Levy is up to 10% since 1.75% is within the range of 0% to 10%. What a mind-boggling logic of semantics.
According our Minister of Communications, @UrsulaOw it will be correct to say that Ghana's proposed E-Levy is up to 10% since 1.75% is within the range of 0% to 10%. What a mind-boggling logic of semantics.
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