The Minister of Finance, Mr Ken Ofori-Atta, has said the proposed E-Levy is not regressive but a comprehensive system to get all potential taxpayers to contribute their quota to national development.
He said the rate of 1.5 per cent and the exemption of the first GH¢100 transfer per day meant that the tax was pro-poor and, therefore, not regressive.
He added that the levy, whose proposed rate had been reduced from 1.75 to 1.5 per cent, was the most effective way to widen the tax net and raise adequate revenue to prosecute the government’s agenda and provide jobs for the youth.
Mr Ofori-Atta gave the explanation when he spoke with the media last Saturday on the sidelines of the 24th meeting of the Ministerial Committee of the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), which he chairs.
He said the ongoing town hall meetings across the country had afforded him the opportunity to properly explain the dynamics of the tax to the populace, saying that it had been well received.
“Ghanaians are largely in favour of paying the E-Levy, contrary to the impression being created from Parliament,” he told newsmen.
Consequently, the minister expressed optimism that the government would be successful at securing parliamentary approval for the levy, which had initially been billed to take off on February 1.
Tax of the future
Commenting on the status of the E-Levy, Mr Ofori-Atta noted that the current situation where only 2.4 million people were paying direct taxes when estimates showed that about 20 million people should be paying, needed to change if the country wanted to adequately fund its development aspirations.
He explained that after various analyses, the E-Levy became the most potent avenue to rope more people into the tax bracket.
He said e-commerce had become the business of the future, with almost every Ghanaian participating in it.
Citing the strong growth in the value of mobile money transactions from GH¢78 billion in 2016 to almost GH¢950 billion last year, Mr Ofori-Atta said: “Clearly, it is a tax handle for the future and we must engage it so that we can support our debt, our employment and our infrastructure.”
“As a friend told me, we have a system of taxes with everybody holding buckets where they can bring in or dodge. Now, we have brought a water-hose system of which everybody will be in there so that we can all contribute,” he noted.
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