E-levy will distort Ghana’s tax structure streamlined in the last 3 decades — Seth Tekper

A former Minister for Finance, Mr. Seth Tekper has cautioned that the Electronic Transaction Levy (E-Levy) being introduced by government would distort the country’s tax structure streamlined in the last 30 years.

Speaking at one of PFM Tax Africa’s dialogue series on the theme: “Ghana’s Economic Outlook for 2022” on Monday, January 24, 2022, he reiterated his position that government has gotten it wrong with the proposed e-levy.

He argued that its implementation will mean Ghanaians will be burdened by double taxation where income that will be taxed would be taxed again when it passes through electronic channels.

Aside the hardships it would bring on the ordinary Ghanaian, Mr. Seth Tekper stressed that gains made over the last three decades to streamline the tax structure for the country will also be distorted.

“The main issue for me is that it is distorting the tax structure that has taken us 30 years to streamline. Whether we should have tariffs, or VAT should be the main tax, or how income tax should be taxed. For me let’s look at the technical side of this E-Levy because how do you tax someone’s already taxed income after deduction now that the person is spending what is left of it,” the former Finance Minister said.

Mr. Seth Tekper who is also the Founder and Executive Director of PFM-TAX Africa told journalists, “If you are not proposing it as a temporary tax then it is distorting our tax structure, the very essence we brought in VAT.

“Let’s look at the tax changes we have made and bring back the more stable ones. What we need now is a stable tax regime.”

According to Mr. Seth Tekper Ghana’s problems are beyond an Electronic Transaction Levy. He opined that government must consider a different alternative to tackle the fiscal challenges of the country.

“E-Levy is not going to solve the fiscal challenges that is facing the country. In the past when we had crisis there is a temporal tax that is brought it for a specific time period. The situation we have now is equal to situations we had in the past. Now we have to look beyond E-Levy,” he emphasised.

Mr. Seth Tekper further proposed that Finance Minister Mr. Ken Ofori-Atta should take into consideration all recommendations that have been suggested, and settle on a compromise that will be good for everyone.

It can be recalled that late last year, the Finance Minister announced plans by government to implement E-Levy to generate more revenue to propel the development of the country.

WIth the proposed e-levy, the government is looking to charge a 1.75% tax on transactions carried out on electronic channels that exceed GHS100.

The levy has been widely rejected by Ghanaians with the Minority in Parliament vowing to use all means to ensure it does not go through.

The levy will top the agenda of parliament this week when the house resumes sitting on Tuesday, January 25, 2022.

Source: modernghana.com