Former Finance Minister Seth Terkper says the E-levy policy if implemented, will disrupt the country’s tax structure.
Speaking at a PFM tax dialogue Mr. Terkper said the policy takes the country back in time, undoing major work that has been done to strengthen the tax system.
“VAT replaces all these taxes so part of my issue is not just about the need for temporary money. Nobody has told us that the e-levy is even a temporary tax. If you’re not proposing it as a temporary tax then it is distorting the tax structure, the very essence why we brought in the VAT” he said.
The E-Levy which is a 1.75% tax will be charged on Mobile Money Transfers between accounts on the same electronic money issuer (EMI) and Mobile Money transfers from an account on one EMI to a recipient on another EMI.
Since its announcement, there have been varying views on it with the majority of Ghanaians proposing total scrapping of the levy.
Due to this, government officials on Thursday, January 20, 2022, began a nationwide public sensitization on the need for the introduction of the controversial e-levy and the many policies and programmes the government will use the revenue accrued from the levy for.
However, Economist and Lecturer at the University of Ghana, Prof. Lord Mensah says claimes by Former Finance Minister Seth Terkper that the implementation of the electronic transfer levy bill will disrupt the country’s tax structure is not viable.
Prof. Lord Mensah tells Citi Business News, its time the country comes together as a whole, to follow a particular structure in order to boost investor confidence.
“I look at the Ghanaian typical tax structure, it has gone through several dynamics, we don’t have a fixed structure. Year in and year out the government introduces new taxes and as a result of that, it creates uncertainty. So, we’ve never had any tax structure for us to say that it is going to be distorted. It’s quite dangerous the way and manner in which we handle our taxes. I think it’s about time we look at this and have a specific tax structure for the years to come” he said.