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E-levy sending Ghana back to 80s – Ato Forson laments

Former Deputy Minister for Finance during the erstwhile Mahama administration, Cassiel Ato Forson, has said the Minority side of Parliament will fiercely resist the e-levy imposed by the Akufo-Addo government on all electronic transactions in the country.

Finance Minister Ken Ofori-Atta announced yesterday that e-transactions will attract a levy of 1.75% of the amount being transferred.

Presenting the 2022 Budget and Economic Policy on Wednesday, November 17, 2021, the sector minister indicated that the government would use the taxes to fund road construction, support SMEs to create more jobs among others.

But the Minority believes it is not prudent to heap taxes on e-transactions at a time the government is encouraging Ghanaians to embrace the policies leading to a cashless society.

Speaking to Prince Kwame Minkah on Tonton Sansan on the sidelines of the budget presentation on TV XYZ Thursday morning, Ato Forson lamented the “wicked tax” and explained that Ghanaians would be discouraged to use electronic ways of doing business because of the taxes.

“The taxes are dangerous. one of such taxes is called the digital tax; I call it the Bawumia tax because he has been championing digitalisation in this country yet came up with a tax that frightens Ghanaians who want to operate in the digital space,” the Ejumako-Enyan-Essiam Legislator argued.

He continued, “The second of such nuisance taxes is the diaspora tax. This tax will ensure Ghanaians pay taxes on remittances which are monies they receive from family members living abroad.”

“Look, these are the same monies they send down here for their projects,” he added while condemning the government move which he said will encourage “black market activities.”

“These remittances help shore up our forex reserves because of the huge nature of funds involved. But with the introduction of these taxes, what will happen is that Ghanaians abroad will find other ways to bring money to the country. They will use the back door and black marketing will flourish in this country. If care isn’t taken, funds that are supposed to go through the banks won’t happen again,’ he contended.

“How do you tax such funds when some are to be used for the healthcare of the aged and other relatives of Ghanaians living abroad,” he quizzed and chastised Government’s Economic Management Team led by Vice President Mahamadu Bawumia for their lack of foresight.

“This tax they expect Ghanaians to pay will send us back to the 1980s where we had to carry cash everywhere we wanted to do business,” Ato Forson said in Akan.

Budget Focus

When Parliament approves the economic policy for the 2022 fiscal year, the Government will spend around GH¢137.5 billion for its projects.

The amount, which is 27.4 percent of Gross Domestic Product (GDP), represents an increase of 23.2 percent over the 2021 projected outturn of GH¢111.6 billion.

Out of the amount, compensation for employees is projected at GH¢35.84 billion, goods and services are also projected at GH¢9.14 billion, with interest payments projected at GH¢37.44 billion.

Furthermore, Capital Expenditure (CAPEX) is projected at GH¢16.39 billion, with other expenditure, mainly comprising Energy Sector Levies (ESL) transfers, payments to Independent Power Producers (IPPs) and financial sector costs (GAT capitalisation) also estimated at GH¢9.96 billion.

Revenue projection

On the revenue front, total revenue and grants for 2022 are projected to rise from a projected outturn of GH¢70.34 billion for 2021 to GH¢100.51 billion.

Out of that amount, domestic revenue is estimated at GH¢99.54 billion, representing an annual growth of 44 percent over the projected outturn for 2021.

Of the total domestic revenue amount, non-oil tax revenue amounts to GH¢77.13 billion, constituting 77.5 percent.

Non-tax revenue (excluding oil) is also projected at GH¢10.25 billion, constituting about 10.3 per cent of domestic revenue.

Of that amount, the Ofori-Ata said, GH¢8.31 billion would be retained for use by ministries, departments and agencies (MDAs), while GH¢1.93 billion would be lodged, with a potential yield of GH¢152 million from the Internally Generated Fund (IGF) Capping Policy.

 

Source: Myxyzonline.com|Ghana

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