Former President John Dramani Mahama has cast doubt on the ability of the e-levy to impact positively on the lives of Ghanaians.
He said government’s own budget proposals show that the e-levy which commenced on Sunday May 1 will not make any significant contribution in resolving the problems but would exert an adverse toll on the people of Ghana.
Delivering an address titled “Ghana at Crossroads” on Monday May 2, the 2020 presidential candidate for the National Democratic Congress (NDC) said “Governments since the 4th Republic have all invested in digital infrastructure in order to modernize our economy. In my time as President, we laid the most extensive number of kilometers of fibre optic cable and further provided 4G LTE wireless broadband in order to bring all parts of our country into the new digital revolution.
“Through these investments we have created the opportunity for Ghanaians to enjoy the ease of electronics transactions. Indeed, Ghanaians have taken to the ease of electronic transactions very well.
“Mobile money payments are used for remittances to parents in the villages, they are used in the markets and supermarkets to pay for groceries purchased, they are used by market women and other traders to pay for replenishing their stocks, and they are used at filling stations to pay for fuel and services.
“Internet and electronic banking have made it easier to move money from account to account without the use of cheques or cash transfers. This is a positive development for our economy and represents the fastest means of shrinking the informal economy and bringing us all into the formal one.
“Unfortunately, in the face of this self-inflicted economic catastrophe, this government against all sound advice has decided to introduce the E-Levy, a regressive tax that heaps more suffering on Ghanaians.
“Recently our President was asked in a BBC interview, why he was choosing to tax the incomes of Ghanaians in their electronic wallets that had already been taxed. The President’s answer was that it is the newest and fastest growing sector of our economy that is not being taxed.
Clearly the President did not understand the question, or he is clueless about the regressive nature of the E-Levy. A worker gets paid in his electronic wallet. His PAYE tax has been deducted already.
“For every transfer or purchase above GHS100 he makes on his e-wallet, he has to pay an additional 1.5% tax. It will now be tempting for such a person to draw cash from his e-wallet and make the payment for his groceries, fuel, entertainment, utility bills etc. all with cash.
The collection of the E-Levy began yesterday and as though a slap in the face, it began on May Day. Already there is a litany of complaints about the implementation. There are complaints of transfers of under GHS100 being subject to tax contrary to the law.
“Government’s desperation to tax Ghanaians to get the nation out of the hell hole it has dumped us will not succeed because Government’s own budget proposals show that the e-levy will not make any significant contribution in resolving our problems but would exert an adverse toll on the people of Ghana.
“We in the NDC do not oppose taxation as a principle. We will not be pretentious and couch fanciful slogans to condemn the principle of taxation like the NPP did in the past. We are, however, implacably opposed to distortionary and burdensome taxes like the e-levy that only force Ghanaians to endure more suffering.”
He further assured that a future NDC government will abolish the e-levy.
“A new National Democratic Congress Government, God willing and with the votes of the sovereign people of Ghana – in 2025 – will repeal the E-Levy Act. Even as this government remains fixated with taxing their way out of economic mismanagement, the Akufo-Addo government has been wasteful. They have failed to demonstrate prudence in public financial management.
“The people of Ghana cannot be called upon to pay more taxes only for the accruing money belonging to the people of Ghana, to be dubiously and wastefully shared among family and friends through various fraudulent procurement practices.”